TY  - JOUR
AU  - McCallum,Bennett T.
TI  - A Linearized Version of Lucas's Neutrality Model
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1160
PY  - 1984
Y2  - April 1984
UR  - http://www.nber.org/papers/w1160
L1  - http://www.nber.org/papers/w1160.pdf
N1  - Author contact info:
Bennett T. McCallum
Tepper School of Business, Posner 256
Carnegie Mellon University
Pittsburgh, PA 15213
Tel: 412/268-2347
Fax: 412/268-6830
E-Mail: bm05@andrew.cmu.edu
AB  - The model developed in Robert Lucas's influential "Expectations and the Neutrality of Money" has not been widely used for extensions or modifications of the original analysis, in part because of its difficulty of manipulation.The present paper describes a linearized version that--unlike other models prominent in the rational expectations literature--retains the original's mainfeatures yet is comparatively easy to manipulate.Two examples of modifications facilitated by this linearization are included. These involve an autoregressive money growth specification and the assumption of lump-sum (rather than proportional)monetary transfers.
ER  -