Monetary non-neutrality in the Sidrauski model under uncertainty
Introducing uncertainty in the Reis's [Reis, R., 2007, The analytics of monetary non-neutrality in the Sidrauski model, Economics Letters 94 (1), 129-135] version of the Sidrauski model leads to a monetary policy that is not super-neutral even though money and consumption are separable in the utility function. This is because the real interest rate is affected by such a policy. Only in the case of an interest rate inelastic money demand does the super-neutrality result survive.
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- Reis, Ricardo, 2007. "The analytics of monetary non-neutrality in the Sidrauski model," Economics Letters, Elsevier, vol. 94(1), pages 129-135, January.
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- Fischer, Stanley, 1979. "Capital Accumulation on the Transition Path in a Monetary Optimizing Model," Econometrica, Econometric Society, vol. 47(6), pages 1433-39, November.
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