Author(s)

Eric Kam¹, John Smithin²

¹Ryerson University, Toronto, Canada.
²York University, Toronto, Canada.

In an important but neglected paper, Begg (1980) attempted to solve the puz-zle of monetary super-neutrality in the steady-state. Super-neutrality was shown to depend on two sufficient conditions, only one of which is necessary. Begg argued that a more general specification restores monetary non-super-neutrality. This note suggests an additional sufficient condition for super-neutrality. The demand for real balances must be modeled as a de-creasing function of the real interest rate. This has implications for models as-suming a steady-state. Harkness (1978) had already shown that the extra suf-ficient condition is a necessary condition for existence.

Monetary Super-Neutrality, Money and Growth, Rational Expectations, Real Interest Rate, Wealth Effect

Kam, E. and Smithin, J. (2022) Money and Economic Growth Revisited: A Note. Theoretical Economics Letters, 12, 1-5. doi: 10.4236/tel.2022.121001.