Empirical Economics

, Volume 21, Issue 1, pp 187–202 | Cite as

Growth and the neutrality of money

  • Paul Evans
Public Services, Money, and Growth Linkages


Using two simple stochastic growth models that nest both exogenous and endogenous growth, this paper shows that money should not be neutral in the long run if it is not neutral in the short run and if growth is endogenous. By contrast, if growth is exogenous, money should be neutral in the long run. The paper also tests whether money is neutral in the long run, finding no contrary evidence. Given that money is not neutral in the short run, this finding indicates that exogenous growth cannot be rejected in favor of endogenous growth.

Key Words

Growth theory endogenous growth exogenous growth monetary theory neutrality of money 

JEL Classification System-Numbers

O40 C40 


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Copyright information

© Physica-Verlag 1996

Authors and Affiliations

  • Paul Evans
    • 1
  1. 1.Department of EconomicsOhio State UniversityColumbusUSA

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