Monetary shocks lead to temporary economic boosts but limited long-term impact.
The study looked at how changes in money supply affect the economy in G-6 countries. They found that when there is more money in the system, interest rates go down temporarily, output goes up for a bit, prices rise, and the local currency loses value. This suggests that changes in money supply play a big role in how monetary policy affects the economy, but don't have a long-term impact on things like real output.