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Review of Economic Perspectives

Národohospodárský obzor; The Journal of Masaryk University

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Volume 16, Issue 3 (Sep 2016)

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The Long-Run Superneutrality of Money Revised: the Extended European Evidence

Oleg Deev
  • Corresponding author
  • Masaryk University, Faculty of Economics and Administration, Department of Finance, Lipová 41a, 602 00 Brno, Czechia
  • Email:
/ Martin Hodula
  • VŠB-Technical University of Ostrava, Economic Faculty, Department of Economics, Sokolská třída 33, 701 21 Ostrava, Czechia
  • Email:
Published Online: 2016-10-13 | DOI: https://doi.org/10.1515/revecp-2016-0012

Abstract

This article investigates the validity of the money superneutrality concept for the large panel of European economies. While focusing exclusively on endogenous growth theories including the Mundell-Tobin effect, we examine the long-run response of real output to a permanent inflation shock in every studied country using a structural vector autoregressive framework. For the majority of countries in our sample, the longrun superneutrality concept is confirmed since the original increase/decrease in output growth fades in time. We also test the additional hypothesis of whether the group of countries with smaller in-sample inflation mean forms the exception to the long-run money superneutrality. As the result, modern economies might be better described from the viewpoint of Sidrauski.

Keywords: endogenous growth theories; superneutrality; SVAR

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About the article

Received: 2015-07-13

Accepted: 2016-08-11

Published Online: 2016-10-13

Published in Print: 2016-09-01



Citation Information: Review of Economic Perspectives, ISSN (Online) 1804-1663, DOI: https://doi.org/10.1515/revecp-2016-0012. Export Citation

© by Oleg Deev. This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License. (CC BY-NC-ND 4.0)

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