Lucas and Hume on Monetary Non-Neutrality: A Tension between the Logic and the Technique of Economics

Arbeitspapier

Translation of old economic doctrines into new technical frameworks led the profession to lose a valid theory of monetary non-neutrality. The theory relates to how additional money diffuses through the economy after entering at different points. Diffusion takes time, redistributes resources, and changes relative prices. This theory of the non-neutrality of money was introduced into economics by David Hume, among others, but it has since disappeared from the leading conversations on monetary non-neutrality. However, the disappearance was not caused by any theoretical or empirical weakness. Using Lucas's Nobel lecture as my point of departure, I argue that it disappeared because it did not fit into the popular technical frameworks.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CHOPE Working Paper ; No. 2015-01

Classification and Topics

• Classification: Wirtschaft
• Subject: non-neutrality of money ; Robert Lucas ; David Hume

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bilo, Simon
• Event: Veröffentlichung
• (who): Duke University, Center for the History of Political Economy (CHOPE)
• (where): Durham, NC
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/149728
• Last update: 10.03.2025, 11:43 AM CET