INFLATIONARY EXPECTATIONS , MONEY GROWTH , AND THE VANISHING LIQUIDITY EFFECT OF MONEY ON INTEREST : A FURTHER INVESTIGATION

@inproceedings{MehraINFLATIONARYE,
  title={INFLATIONARY EXPECTATIONS , MONEY GROWTH , AND THE VANISHING LIQUIDITY EFFECT OF MONEY ON INTEREST : A FURTHER INVESTIGATION},
  author={Yash P. Mehra}
}
An important issue in discussion of the transmission mechanism of monetary policy is the response pattern of nominal interest rates to changes in the growth rate of money. The traditional analysis of the effects of changes in money growth on nominal interest rates runs in terms of liquidity, income, and expectations effects.l Consider an increase in the growth rate of money. Initially, there is an excess supply of money at the existing income, interest rate, and the price level. If the price… CONTINUE READING

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