Long-Run Impacts of Inflation Tax with Endogenous Capital Depreciation
This paper examines the long-run impact of inflation tax in the context of a generalized Ak growth model in which the rate of capital depreciation is endogenously determined. It is assumed that the rate of capital depreciation positively depends on capital utilization rate and negatively depends on maintenance spending. Money is introduced via a cash in advance constraint that may apply to the maintenance expenditure as well as to consumption and investment spending. We find that the long-run effects of inflation tax are more complex than those obtained in the monetary Ak growth model with a fixed capital depreciation rate. In particular, the relation between inflation and growth is highly sensitive to the specifications of the capital depreciation technology as well as to the forms of cash-in-advance constraint.
|Date of creation:||13 Jul 2009|
|Date of revision:|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
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.:
- Omar Licandro & Luis A. Puch & J. Ramón Ruiz-Tamarit, 2001.
"Optimal growth under endogenous depreciation, capital utilization and maintenance costs,"
Fundación SEPI, vol. 25(3), pages 543-559, September.
- Omar Licandro & Luis A. Puch González & J. Ramón Ruiz Tamaritz, 2001. "Optimal Growth under Endogeneous Depreciation, Capital Utilization and Maintenance Costs," Documentos de Trabajo del ICAE 0101, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
- Omar Licandro & Luis A. Puch & J. Ramón Ruiz-Tamarit, . "Optimal Growth under Endogenous Depreciation, Capital Utilization and Maintenance Costs," Working Papers 2000-23, FEDEA.
- Ellen R. McGrattan & James A. Schmitz, 1999. "Maintenance and repair: too big to ignore," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Fall, pages 2-13.
- repec:ebl:ecbull:v:5:y:2004:i:2:p:1-7 is not listed on IDEAS
- Seiya Fujisaki & Kazuo Mino, 2009.
"Long-Run Impacts of Inflation Tax in the Presence of Multiple Capital Goods,"
AccessEcon, vol. 29(3), pages 1644-1652.
- Fujisaki, Seiya & Mino, Kazuo, 2009. "Long-Run Impacts of Inflation Tax in the Presence of Multiple Capital Goods," MPRA Paper 16964, University Library of Munich, Germany.
- Jang-Ting Guo & Kevin J. Lansing, 2005.
"Maintenance expenditures and indeterminacy under increasing returns to scale,"
Working Paper Series
2005-10, Federal Reserve Bank of San Francisco.
- Jang-Ting Guo & Kevin J. Lansing, 2007. "Maintenance expenditures and indeterminacy under increasing returns to scale," International Journal of Economic Theory, The International Society for Economic Theory, vol. 3(2), pages 147-158.
- 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).
- Itaya, Jun-Ichi & Mino, Kazuo, 2007. "Technology, Preference Structure, And The Growth Effect Of Money Supply," Macroeconomic Dynamics, Cambridge University Press, vol. 11(05), pages 589-612, November.
- J. Aznar-Márquez & J. R. Ruiz-Tamarit, .
"Endogenous Growth, Capital Utilization and Depreciation,"
- J. Aznar-Marquez & J.R. Ruiz-Tamarit, 2001. "Endogenous Growth, Capital Utilization and Depreciation," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2001037, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- repec:ebl:ecbull:v:5:y:2008:i:13:p:1-7 is not listed on IDEAS
- 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.
- Jang-Ting Guo & Shu-Hua Chen, 2008. "On the growth and velocity effects of money," Economics Bulletin, AccessEcon, vol. 5(13), pages 1-7.
- 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.
- repec:adr:anecst:y:2000:i:58:p:05 is not listed on IDEAS
- repec:ebl:ecbull:v:5:y:2007:i:11:p:1-7 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:16657. 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: (Joachim Winter)
If references are entirely missing, you can add them using this form.