Long-Run Impacts of Inflation Tax in the Presence of Multiple Capital Goods
This paper examines the long-run impact of inflation tax in the context of a generalized Ak growth model in which the production technology uses two types of capital stocks under a constant-returns-to-scale technology. We find that unless investment expenditure for each type of capital is subject to the same degree of cash-in-advance constraint, a change in the money growth rate affects the steady-state level of factor intensity. It is shown that if the balanced-growth path is uniquely given, we still have a negative longrun relationship between money growth and the growth rate of real income. However, due to the endogenous determination of the factor intensity, the negative relation between the velocity of money and the rate of inflation may not be established.
Volume (Year): 29 (2009)
Issue (Month): 3 ()
|Contact details of provider:|| |
References listed on IDEAS
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.:
- Sailesh K. Jha & Ping Wang & Chong K.Yip, 2000.
"Dynamics in a Transactions-Based Monetary Growth Model,"
Vanderbilt University Department of Economics Working Papers
0005, Vanderbilt University Department of Economics.
- Jha, Sailesh K. & Wang, Ping & Yip, Chong K., 2002. "Dynamics in a transactions-based monetary growth model," Journal of Economic Dynamics and Control, Elsevier, vol. 26(4), pages 611-635, April.
- Chen, Shu-Hua & Guo, Jang-Ting, 2008. "Velocity of money, equilibrium (in)determinacy and endogenous growth," Journal of Macroeconomics, Elsevier, vol. 30(3), pages 1085-1096, September.
- repec:ebl:ecbull:v:5:y:2004:i:2:p:1-7 is not listed on IDEAS
- Jang-Ting Guo & Shu-Hua Chen, 2008. "On the growth and velocity effects of money," Economics Bulletin, AccessEcon, vol. 5(13), pages 1-7.
- Ming Hon Suen & Chong K. Yip, 2001.
"Superneutrality, Indeterminacy, and Endogenous Growth,"
Departmental Working Papers
_136, Chinese University of Hong Kong, Department of Economics.
- Suen, Ming-Hon & Yip, Chong K., 2005. "Superneutrality, indeterminacy and endogenous growth," Journal of Macroeconomics, Elsevier, vol. 27(4), pages 579-595, December.
- repec:ebl:ecbull:v:5:y:2008:i:13:p:1-7 is not listed on IDEAS
- repec:ebl:ecbull:v:5:y:2007:i:11:p:1-7 is not listed on IDEAS
- Itaya, Jun-Ichi & Mino, Kazuo, 2007.
"Technology, Preference Structure, And The Growth Effect Of Money Supply,"
Cambridge University Press, vol. 11(05), pages 589-612, November.
- Jun-ichi Itaya & Kazuo Mino, 2005. "Technology, Preference Structure, and the Growth Effect of Money Supply," Discussion Papers in Economics and Business 05-35, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-09-00359. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (John P. Conley)
If references are entirely missing, you can add them using this form.