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Evidence of the long-run neutrality of money : The case of South Korea and Taiwan

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  • Evidence of the long-run neutrality of money
  • Chen, Shyh-Wei
  • Vanderbilt University


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Title Evidence of the long-run neutrality of money
Similar Titles
Sub Title

The case of South Korea and Taiwan

Material Type Reports
Author(English)

Chen, Shyh-Wei

Publisher

[Nashville]:Vanderbilt University

Date 2007
Journal Title; Vol./Issue Economics Bulletin:vol. 3(no. 64)
Pages 17
Subject Country South Korea(Asia and Pacific)
Taiwan(Asia and Pacific)
Language English
File Type Link
Subject Economy < Macroeconomics
Holding COnnecting REpositories

Abstract

This paper investigates the long-run neutrality of money using quarterly data of South Korea and Taiwan and the methodology of King and Watson (1997); particular attention is given to the integration and cointegration properties of the variables. Empirical evidence provides considerable support for the long-run neutrality of money with respect to real output in the case of South Korea, indicating that it is consistent with two of the business cycle, i.e, the monetary intertemporal model and the monetary misperceptions theory. There is little evidence that the long-run monetary neutrality hypothesis holds in the case of Taiwan. Based on the estimated results, the hypothesis of the short-run neutrality of money is rejected for both countries.