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.
- Foreign currency component
- Money neutrality
RAN, J., VOON, J. P. T., & LI, G. (2008). Effects of foreign currency component in monetary aggregates on money neutrality. Economics Letters, 99(3), 435-438. https://doi.org/10.1016/j.econlet.2007.09.008