Theoretical propositions A key issue in monetary theory is whether changes in the stock of money or in the rate of growth of money can have lasting effects on real economic variables. In particular, the question concerning the so-called superneutrality of money - whether a permanent change in money growth has no long-term effects on the real interest rate, capital accumulation and output growth - has been the subject of extensive theoretical analysis since the early 1960s. In a seminal contribution, James Tobin (1965) showed that in a simple model with agents saving for future consumption only out of current income, by either holding money balances or investing in real capital assets, an increase in monetary expansion can lead to higher growth. Thus, Tobin's analysis refuted the superneutrality of money by relying on a fairly straightforward mechanism related to the role of money as an asset and a store of wealth. An increase in money growth leads to a higher rate of inflation that reduces the own rate of return on money and induces a portfolio shift in favour of real capital. This generates an increase in the capital stock and a higher level of output per person in the long run. His analysis, however, examined the short-term positive effect of a permanent increase in inflation on real saving and the demand for capital and not the long-term effects of inflation on the real rate of interest and economic growth.Modes:

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To foster economic growth in Europe requires both an accurate diagnosis of the factors determining or constraining its growth performance and an appropriate policy prescription regarding the macroeconomic policies and structural reforms needed to achieve higher and sustainable growth. Today, I will discuss the contribution of monetary policy to economic growth, an issue which has long been the subject of theoretical and policy debates among economists. At the present juncture, with weak growth and even talk of deflation risks, and given actual or perceived constraints on economic policies, this topic is attracting increasing interest, the debate has occasionally become rather heated, and there have been numerous calls from politicians and academics for monetary policy to pay more attention to growth. Against this background, I welcome this chance to add my own views to the ongoing discussion. I will do so by examining a number of fundamental issues concerning the role of monetary policy in fostering economic growth.

In order to promote economic growth in Europe, it is essential to make a precise diagnostic of the variables influencing or restraining this growth as well as a suitable policy prescription for the macroeconomic measures and structural changes required to achieve higher and more sustained growth.

Today, I'll talk about how monetary policy affects economic growth, a topic that has long been the focus of theoretical and practical discussions among economists.

There have been many calls for monetary policy to pay more attention to growth at this point because of the weak growth and even talk of deflation risks, as well as actual or perceived constraints on economic policies. As a result, this topic is attracting more interest and the debate has occasionally gotten quite heated.

With this in mind, I appreciate