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Effects of foreign currency component in monetary aggregates on money neutrality

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  • Ran, Jimmy
  • Voon, Jan P.
  • Li, Guangzhong

Abstract

We test the money neutrality from a new angle. The in-sample investigation provides evidence that M1 and M2 with or without foreign currency component affect nominal GDP. The out-of-sample approach shows money tends to affect nominal more than real GDP.

Suggested Citation

  • Ran, Jimmy & Voon, Jan P. & Li, Guangzhong, 2008. "Effects of foreign currency component in monetary aggregates on money neutrality," Economics Letters, Elsevier, vol. 99(3), pages 435-438, June.
    • Handle: RePEc:eee:ecolet:v:99:y:2008:i:3:p:435-438
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    References listed on IDEAS

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