There is no monetary neutrality

The usual theory of monetary neutrality implies that monetary policy (money supply growth) has only a transitory effect on the real economy and has a long-term effect only on prices of goods and services: the Phillips curve is vertical in the long run (the unemployment rate is equal to the natural rate of unemployment, inflation depends only on money supply growth). But when we look at developments in OECD countries, we see in the long term: No correlation between money supply growth and inflation; A long-term link between monetary policy and real long-term interest rates, i.e. a long-term effect of monetary policy on the real economy; A long-term link between money supply growth and asset prices (equities, real estate), which also plays a role in maintaining a link between monetary policy and real growth. So there is no monetary neutrality at all: monetary policy influences asset prices and the real economy and not inflation in prices of goods and services in the long run. This means that central banks can change the real long-term economic equilibrium and equilibrium unemploymen t , exactly the opposite of what is usually assumed.