Exchange rates, prices and money: a long-run perspective

De Grauwe, Paul ORCID: 0000-0001-5225-1301 and Grimaldi, Marianna (2001) Exchange rates, prices and money: a long-run perspective. International Journal of Finance and Economics, 6 (4). pp. 289-313. ISSN 1076-9307

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Abstract

In this paper we analyse the long-run proportionality and neutrality propositions between inflation and money growth and between exchange rate changes and money growth. Using a sample of 100 countries over a thirty-year period we find that the evidence in favour of these propositions is weak for the low inflation countries and very strong for the high inflation countries. We propose an explanation based on productivity shocks and transaction costs.

Item Type:	Article
Official URL:	http://onlinelibrary.wiley.com/journal/10.1002/%28...
Additional Information:	© 2001 John Wiley & Sons
Divisions:	European Institute
Subjects:	H Social Sciences > HG Finance J Political Science > JZ International relations
JEL classification:	F - International Economics > F3 - International Finance > F31 - Foreign Exchange F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F40 - General
Date Deposited:	05 Oct 2012 08:31
Last Modified:	11 Dec 2024 22:25
URI:	http://eprints.lse.ac.uk/id/eprint/46560

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