Dispersed information and the non-neutrality of money: Fifty years after Lucas 1972

[en] This paper highlights the renewed interest in Lucas’s explanation of the non-neutrality of money put forward in his 1972 article – explanation based on information dispersion and signal extraction problems – by an increasing part of the literature investigating the transmission mechanism of monetary policy shocks. We review the main contributions to this renewal, and illustrate the relationship between this work and Lucas’s own model. We also show that some of the assumptions made by this line of research have been questioned by subsequent developments on the same track, thereby challenging its ability to produce large amounts of monetary non-neutrality and calling for further research.

Disciplines :

Macroeconomics & monetary economics

Author, co-author :

Clerc, Pierrick ; Université de Liège - ULiège > HEC Liège : UER > UER Economie : Macroéconomie et pensée économique

Dos Santos Ferreira, Rodolphe

Language :

English

Title :

Dispersed information and the non-neutrality of money: Fifty years after Lucas 1972

Publication date :

2022

Journal title :

Journal of Economic Methodology

ISSN :

1350-178X

eISSN :

1469-9427

Publisher :

Routledge, United Kingdom

Peer reviewed :

Peer Reviewed verified by ORBi

Available on ORBi :

since 02 February 2022

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120 (5 by ULiège)

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