| Author: | Fukuda, S. |
| Title: | The role of monetary policy in eliminating noncovergent dynamic paths |
| Journal: | International Economic Review
1997 : FEB, VOL. 38:1, p. 249-261 |
| Index terms: | ECONOMICS MONETARY POLICY INTERNATIONAL |
| Language: | eng |
| Abstract: | This paper investigates the effects of money growth on nonconvergent dynamic paths in a money-in-utility model. When relative risk aversion is decreasing in money, period-two cycle and sunspot equilibria are always associated with a high rate of money supply growth. However, when relative risk aversion is increasing in money, it is ambiguous whether they are associated with either high or low rate of money supply growth. The paper also investigates the same problem in a transaction cost model. |
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