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Inflation aversion and macroeconomic policy in a perfect foresight monetary model

  • Wang, Gaowang
  • Zou, Heng-fu

This paper reexamines monetary non-superneutrality and the optimality of the optimum quantity of money in the money-in-utility Sidrauski model with endogenous fluctuations of the time preference by introducing inflation aversion. It is shown that the long-run superneutrality of the standard Sidrauski model does not hold, and Friedman's optimum quantity of money is not optimal.

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Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 28 (2011)
Issue (Month): 4 (July)
Pages: 1802-1807

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Handle: RePEc:eee:ecmode:v:28:y:2011:i:4:p:1802-1807
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30411

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