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Inflation aversion and macroeconomic policy in a perfect foresight monetary model

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  • Wang, Gaowang
  • Zou, Heng-fu

Abstract

This paper reexamines monetary non-superneutrality and the optimality of the optimum quantity of money in the money-in-utility Sidrauski model with endogenous fluctuations of the time preference by introducing inflation aversion. It is shown that the long-run superneutrality of the standard Sidrauski model does not hold, and Friedman's optimum quantity of money is not optimal.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 28 (2011)
Issue (Month): 4 (July)
Pages: 1802-1807

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Handle: RePEc:eee:ecmode:v:28:y:2011:i:4:p:1802-1807

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Web page: http://www.elsevier.com/locate/inca/30411

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Keywords: Inflation aversion Endogenous time preference Monetary superneutrality Optimum quantity of money;

References

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Citations

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Cited by:
  1. Gaowang Wang & Heng-fu Zou, 2011. "Inflation Aversion and the Optimal Inflation Tax," CEMA Working Papers 480, China Economics and Management Academy, Central University of Finance and Economics.
  2. Shu-Hua Chen, 2012. "On the Growth and Stability Effects of Habit Formation and Durability in Consumption," Annals of Economics and Finance, Society for AEF, vol. 13(2), pages 283-298, November.

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