The relevance of money for economic development

Resumo

Why are macroeconomic considerations, in particular those about money and currencies, relevant for economic policy if the overall goal of governments is welfare for the majority of the population? Broadly speaking, economic theory offers two but contradicting views on whether and how money essentially affects economic development: In the neoclassical paradigm money is understood purely as a medium of exchange that enables transactions in the real economic sphere but is neutral to economic development. In this view, the real economy, including investment, production and employment, is not much affected by monetary policy decisions. In the neoclassical approach, investment is the direct result of the propensity to save and the influence of policies on the decision of private households to save or to consume is rather small. Prize stabilization is needed to avoid distortions in the optimal allocation of resources.

Ficha do documento

Tipo

Outro

Ano

2010

Instituição

Fundação Getulio Vargas

Fonte

Repositório da FGV

Idioma

Inglês

Acesso

Não informado

Identificador

oai:repositorio.fgv.br:10438/16253

Temas

EconomiaDesenvolvimento Econômico

Palavras-chave

EconomiaDesenvolvimento econômico