@techreport{NBERw6608,
 title = "The Liquidity Effect and Long-Run Neutrality",
 author = "Ben S. Bernanke and Ilian Mihov",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "6608",
 year = "1998",
 month = "June",
 URL = "http://www.nber.org/papers/w6608",
 abstract = {The propositions that monetary expansion lowers short-term nominal interest rates (the liquidity effect), and that monetary policy does not have long-run real effects (long-run neutrality), are widely accepted, yet to date the empirical evidence for both is mixed.  We reconsider both propositions simultaneously in a structural VAR context, using a model of the market for bank reserves due to Bernanke and Mihov (forthcoming).  We find little basis for rejecting either the liquidity effect or long-run neutrality.  Our results are robust over the space of admissible model parameter values, and to the use of long-run rather than short-run identifying restrictions.},
}