Long-run money neutrality means that an increase in the money supply has no effect on real interest rates, investment, or output in the long run.

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Long-run money neutrality is a concept in macroeconomics that suggests that changes in the money supply do not have any significant impact on real variables such as output, employment, and real interest rates in the long run. This idea is based on the assumption that changes in the money supply only affect nominal variables such as prices and inflation rates in the long run, and therefore has no effect on real economic outcomes. While this concept is debated amongst economists and may not hold true in all cases, it is generally considered to be a valid theory in macroeconomic analysis.

Long-Run Money Neutrality Means That an Increase in the Money