A New Approach to Inflation Aversion
AbstractThis 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 in?ation 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 InfoPaper provided by China Economics and Management Academy, Central University of Finance and Economics in its series CEMA Working Papers with number 471.
Length: 19 pages
Date of creation: Nov 2010
Date of revision:
Publication status: Published in Economic Modelling, Jul 2011, pages 1802-1807
Inflation Aversion; Endogenous Time Preference; Monetary Superneutrality; Optimum Quantity of Money;
Find related papers by JEL classification:
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-07-21 (All new papers)
- NEP-CBA-2011-07-21 (Central Banking)
- NEP-MAC-2011-07-21 (Macroeconomics)
- NEP-MON-2011-07-21 (Monetary Economics)
- NEP-UPT-2011-07-21 (Utility Models & Prospect Theory)
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