There are a number of other reasons why PIP fails-see Buiter (1980) for an interesting discussion. For example, private agents may not have rational expectations, or there may be nominal price stickiness. Furthermore, even though anticipated monetary policy may not be able to cause deviations of output from its natural level, anticipated monetary policy may affect the natural rate itself. A theoretic (albeit empirically not so relevant) example is the Mundell-Tobin effect: a higher monetary growth rate depresses the real interest rate, and this boosts capital accumulation and the natural level of output.

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