Alina K. Gerelishina Monetary Neutrality: From Classical Theory to Modern Perspectives

DOI: 10.38050/2078-3809-2026-18-2-20-42

Abstract

This paper is devoted to a systemic analysis of the problem of monetary neutrality. It examines the main theoretical approaches to interpreting monetary neutrality – ranging from the classical and neoclassical traditions to Keynesian, monetarist, New Keynesian, and Post-Keynesian concepts. Particular attention is paid to the conditions under which the standard hypothesis of neutrality may be violated.

The main contribution of this study lies in the systematization of existing approaches to analyzing monetary neutrality and the identification of key channels of money non-neutrality. The paper demonstrates that deviations from neutrality can arise through a range of mechanisms: price and wage rigidity, imperfect information and expectation formation, financial frictions and credit constraints, structural changes in the economy, as well as institutional features of monetary policy. The roles of the investment channel of non-neutrality, the labor market channel, and the inflation cost channel are discussed separately.

The proposed system of non-neutrality channels allows for the integration of disparate results from theoretical and empirical research into a unified logical framework and clarifies the boundaries of applicability for the hypothesis of long-run monetary neutrality.

Keywords: monetary policy, economic growth, monetary neutrality.

JEL: B22, E12, E52.

For citation: Gerelishina, A.K. (2026) Monetary Neutrality: From Classical Theory to Modern Perspectives. Scientific Research of Faculty of Economics. Electronic Journal, vol. 18, no. 2, pp. 20-42. DOI: 10.38050/2078-3809-2026-18-2-20-42.

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