Date of Original Version

Fall 1995

Type

Article

Abstract or Description

Monetarist analysis of the transmission process highlights the response of relative prices and real wealth to monetary (and other) impulses. Monetary impulses are neutral in the long run. Short-run nonneutrality reflects uncertainty, incomplete information about the persistence and nature of impulses, fixed contracts, and other institutional detail. Patterns of change in relative prices have some common features but they also differ from cycle to cycle and by countries. This paper compares the monetarist analysis of intermediation to the lending view and presents evidence on the role of relative prices, lending, and other types of intermediation.

DOI

10.1257/jep.9.4.49

Share

COinS
 

Published In

Journal of Economic Perspectives, 9, 4, 49-72.