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On the long-run relationship between inflation and output in a spatial overlapping generations model

  • Anthonisen, Niels
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    The paper builds a model that features spatial differentiation of markets, and then uses it to study, first, the relationship between inflation and the steady-state level of output, and second, the relationship between inflation and the steady-state distribution of output across the economy. A steady-state of the model entails a stationary distribution of money across the locations of the economy. With all else held fixed, a change in the rate of money-growth induces a change in the distribution of money, which leads to a change in labour supply and production throughout the economy. Thus the distribution of money provides a channel through which a change in monetary policy affects real economic activity.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0165188913001413
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    Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

    Volume (Year): 37 (2013)
    Issue (Month): 12 ()
    Pages: 2500-2524

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    Handle: RePEc:eee:dyncon:v:37:y:2013:i:12:p:2500-2524
    Contact details of provider: Web page: http://www.elsevier.com/locate/jedc

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    20. Aleksander Berentsen & Gabriele Camera & C hristopher W aller, 2005. "The Distribution Of Money Balances And The Nonneutrality Of Money," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(2), pages 465-487, 05.
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