Publisher's Synopsis
"Wealth Effects and Monetary Theory" returns to the key but recently neglected issues of how changes in price variables - particularly the aggregate price level and the interest rate - affect wealth and hence the economy's behaviour.;The real balance effect as found in the current literature is but a special case of the more general effects that the book examines. Professor Sweeney contends that, though consumers may feel better off when inflation and interest rates fall, the real effect on wealth of these changes is, to all intents and purposes, zero.;Movements in conventional measures of wealth do not in general correspond to the changes in wealth the book finds. This throws into doubt the large amount of empirical work that uses conventional measures of wealth.;The book has an important degree of topicality because of its view of budget deficits. For example the US deficit is currently causing considerable anxiety among Western governments.;The book is aimed at professional macroeconomists and graduate students.
