Dynamic behavior of capital accumulation in a cash-in-advance model
AbstractThis paper analyzes the dynamic behavior of capital accumulationin Stockman's (1981) cash-in-advance model. If the cash-in-advance constraint applies only to consuittion, then money is superneutral along the transition path as well as in the long run. Alternatively, if the cash-in-advance constraint applies to gross investment as well as consumption, then a permanent increase in the rate of monetary growth reduces the steady state capital stock. The effect on the speed of adjustment depends on the sign of a certain simple function of the parameters of preferences and technology.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Monetary Economics.
Volume (Year): 16 (1985)
Issue (Month): 1 (July)
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Web page: http://www.elsevier.com/locate/inca/505566
Other versions of this item:
- Andrew B. Abel, 1985. "Dynamic Behavior of Capital Accumulation in a Cash-in-Advance Model," NBER Working Papers 1549, National Bureau of Economic Research, Inc.
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- Fischer, Stanley, 1979. "Capital Accumulation on the Transition Path in a Monetary Optimizing Model," Econometrica, Econometric Society, vol. 47(6), pages 1433-39, November.
- Abel, Andrew B., 1987.
"Optimal monetary growth,"
Journal of Monetary Economics,
Elsevier, vol. 19(3), pages 437-450, May.
- Andrew B. Abel, 1987. "Optimal Monetary Growth," NBER Working Papers 2136, National Bureau of Economic Research, Inc.
- Andrew B. Abel, . "Optimal Monetary Growth," Rodney L. White Center for Financial Research Working Papers 2-87, Wharton School Rodney L. White Center for Financial Research.
- Andrew B. Abel, . "Optimal Monetary Growth," Rodney L. White Center for Financial Research Working Papers 02-87, Wharton School Rodney L. White Center for Financial Research.
- Stockman, Alan C., 1981. "Anticipated inflation and the capital stock in a cash in-advance economy," Journal of Monetary Economics, Elsevier, vol. 8(3), pages 387-393.
- Brock, William A., 1975. "A simple perfect foresight monetary model," Journal of Monetary Economics, Elsevier, vol. 1(2), pages 133-150, April.
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