Tests of the Money Neutrality and Rationality Hypotheses: The Case of Japan 1973-1985

November 1986
Journal of Money, Credit & Banking (Ohio State University Press);Nov86, Vol. 18 Issue 4, p458
Academic Journal
The article reports on the money neutrality and rationality in Japan. The macroeconomic rational expectations hypothesis is used in testing money neutrality and rationality in Japan. Research on Japan has found that money does not have a neutral effect on production. During the period of 1974-1982 the Phillips curve experienced in Japan was vertical and the synchronized wage setting process was a source of non-neutrality. Research is also done to determine the sources of stationarity in the output data.


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