A Study on Lucas’ “Expectations and the Neutrality of Money’’

Abstract

This short article shows that the functional equation on the equilibrium price function is more complicated than that considered by Lucas [1], and that modification is required to complete the proof. Furthermore, we shall provide a sufficient condition that guarantees the uniqueness of the equilibrium price function.

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M. Otaki, "A Study on Lucas’ “Expectations and the Neutrality of Money’’," Theoretical Economics Letters, Vol. 2 No. 5, 2012, pp. 438-440. doi: 10.4236/tel.2012.25081.

Conflicts of Interest

The authors declare no conflicts of interest.

References

[1] R. E. Lucas Jr., “Expectations and the Neutrality of Money,” Journal of Economic Theory, Vol. 4, No. 2, 1972, pp. 103-124. doi:10.1016/0022-0531(72)90142-1
[2] R. E. Lucas, Jr., “Corrigendum to `Expectations and the Neutrality of Money,” Journal of Economic Theory, Vol. 31, No. 1, 1983, pp. 197-199. doi:10.1016/0022-0531(83)90031-5
[3] C. G. Small, “Functional Equations and How to Solve Them,” Springer Science + Business Media, New York, 2007.

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