ABSTRACT
Although money growth in all 42 countries in our sample has been very high, especially in developing countries and during periods before inflation-targeting in developed countries, increasing the quantity of money – money growth – is unrelated to real GDP growth in all 42 countries in our sample. This is the expected super-neutrality result. Further, and most importantly, money growth has not stimulated real GDP in the short run either, except in a few countries in our sample from 1960 to 2020, namely Singapore, Gabon, South Africa, Trinidad and Tobago, New Zealand, and the United States between 1960 and 1985 only. These latest test results beg the question: why do countries, and especially the developed inflation-targeting countries, continue to print money at high rates? What purpose does a high growth rate of money serve if it does not stimulate the real economy?
