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A New Approach to Inflation Aversion

Author

Listed:
  • Gaowang Wang

    (Wuhan University)

  • Heng-fu Zou

    (CEMA, Central University of Finance and Economics
    Shenzhen University
    Wuhan University)

Abstract

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 in?ation 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.

Suggested Citation

  • Gaowang Wang & Heng-fu Zou, 2010. "A New Approach to Inflation Aversion," CEMA Working Papers 471, China Economics and Management Academy, Central University of Finance and Economics.
  • Handle: RePEc:cuf:wpaper:471
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Inflation Aversion; Endogenous Time Preference; Monetary Superneutrality; Optimum Quantity of Money;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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