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The Dynamic Relationship between Inflation and Output Growth in a Cash-Constrained Economy

Author

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  • Lu Chia-Hui

    (National Taipei University)

  • Chen Been-Lon

    (Academia Sinica)

  • Hsu Mei

    (National Taipei University)

Abstract

This paper studies the dynamic relationship between inflation and output growth in neoclassical growth models with endogenous cash constraints. We show this dynamic relationship is negative if the degree of cash constraints on investment is smaller than the degree of cash constraints on consumption but is positive if otherwise.

Suggested Citation

  • Lu Chia-Hui & Chen Been-Lon & Hsu Mei, 2011. "The Dynamic Relationship between Inflation and Output Growth in a Cash-Constrained Economy," The B.E. Journal of Macroeconomics, De Gruyter, vol. 11(1), pages 1-29, May.
    • Handle: RePEc:bpj:bejmac:v:11:y:2011:i:1:n:15
    DOI: 10.2202/1935-1690.2145
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