Decreasing marginal impatience, income distribution and demand for money: Theory and evidence
AbstractThis Paper develops a dynamic, theoretical model of demand for money under decreasing marginal impatience (DMI).Given certain conditions, the steady state is shown to be saddle-path stable and unique. It is shown that, under DMI, an increase in income inequality increases the aggregate demand for money. Empirical evidence supporting this hypothesis is provided in the context of the U.S. economy.
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Bibliographic InfoPaper provided by Indian Statistical Institute, New Delhi, India in its series Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers with number 04-04.
Length: 29 pages
Date of creation: Feb 2004
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-06-02 (All new papers)
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