TY  - CHAP
AB  - Abstract The concept of “neutral money” has a long history in monetary theory and macroeconomics. Like a number of other macro concepts, its meaning has been subject to a variety of interpretations over the decades. I explore the way in which Hayek used this term in his monetary writings in the 1930s and argue that “neutrality” for Hayek was best understood as the idea that monetary institutions were ideal if money, and changes in its supply, did not independently affect the process of price formation and thereby create false signals leading to economic discoordination, and especially of the intertemporal variety. This view was rooted in his work on money and the trade cycle in the late 1920s and early 1930s and also bound up with his understanding of “equilibrium theory.” The importance of his concept of neutrality was that it served as a benchmark for judging the comparative effectiveness of different monetary regimes and policies. That use is still relevant today.
VL  - 20
SN  - 978-1-78635-274-3, 978-1-78635-273-6/1529-2134
DO  - 10.1108/S1529-213420160000020004
UR  - https://doi.org/10.1108/S1529-213420160000020004
AU  - Horwitz Steven
PY  - 2016
Y1  - 2016/01/01
TI  - Hayek on the Neutrality of Money
T2  - Studies in Austrian Macroeconomics
T3  - Advances in Austrian Economics
PB  - Emerald Group Publishing Limited
SP  - 61
EP  - 78
Y2  - 2024/04/16
ER  -