Money supply and capital accumulation on the transition path revisited
AbstractFischer (1979) and Asako (1983) analyze the sign of the correlation between the growth rate ofmoney and the rate of capital accumulation on the transition path. Both plug a CRRA utility(based on a Cobb-Douglas and a Leontief function, respectively) into Sidrauski's model - yetreturn contrasting results. The present analysis, by using a more general CES utility, presents bothof those settings and conclusions as limiting cases, and generates economic gures more consistentwith reality (for instance, the interest-rate elasticity of the money demands derived from thoseprevious works is necessarily 1 and 0, respectively).R
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Bibliographic InfoPaper provided by FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil) in its series Economics Working Papers (Ensaios Economicos da EPGE) with number 702.
Date of creation: 22 Feb 2010
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- Rubens Penha Cysne & David Turchick, 2010. "Money Supply and Capital Accumulation on the Transition Path Revisited," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 42(6), pages 1173-1184, 09.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Edward Nelson, 2008.
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- Cysne, Rubens Penha & Turchick, David, 2009. "On the integrability of money-demand functions by the Sidrauski and the shopping-time models," Journal of Banking & Finance, Elsevier, vol. 33(9), pages 1555-1562, September.
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- Robert E. Lucas, Jr., 2000. "Inflation and Welfare," Econometrica, Econometric Society, vol. 68(2), pages 247-274, March.
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