Reorientation of the Time-Series Analyses for Macroeconomics

In empirical studies of macroeconomic theories, close attention should be paid to the relationships between the deterministic trends of different variables, especially when economic relations are investigated in the context of economic growth. The paper explains in an expository manner what kind of research can be undertaken to examine the reality of macroeconomic theories in terms of deterministic trends. Japanese postwar quarterly data of money, price, income and Solow's residuals are analysed to study the reality of the neutrality hypothesis regarding money.