Inflation Stabilisation with Durable Goods and Endogenous Time Preference
We consider inflation stabilisation policies for a small open economy with an endogenous time preference when consumption exhibits durability. The time preference effect and the durability effect have competing influences on the adjustment of consumption expenditures, which will likely exhibit an initial boom followed by a recession. Further, inflation stabilisation leads to an increase in labour supply and a boom in investment and output. The country experiences a sharp deterioration in its net foreign asset position. Copyright © 2009 The Economic Society of Australia.
Year of publication: |
2010
|
---|---|
Authors: | MANSOORIAN, ARMAN ; MOHSIN, MOHAMMED |
Published in: |
The Economic Record. - Economic Society of Australia - ESA, ISSN 1475-4932. - Vol. 86.2010, 274, p. 342-351
|
Publisher: |
Economic Society of Australia - ESA |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Durable goods, time preference and the dynamics of the current account
Mansoorian, Arman, (2008)
-
The effects of inflation in a small open economy with durability in consumption
Mansoorian, Arman, (2010)
-
On the implications of different cash-in-advance constraints with endogenous labor
Mansoorian, Arman, (2007)
- More ...