We examine the role of money, allowing for three competing environments: the New Keynesian model with separable utility … and static money demand; a non-separable utility variant with habit formation; and a version with adjustment costs for … holding real balances. The last two variants imply forward-looking behavior of real money balances, as it is optimal for …

This paper revisits the issue of money growth versus the interest rate as the instrument of monetary policy. Using a … of inflation relative to money growth depends on whether the central bank follows a money growth rule or an interest rate … rule. With a money growth rule, inflation is not persistent and the price level is much more volatile than the money supply …

because of a change in its day-to-day behavior in money markets or the way it reacts to news about unemployment or real GDP …

Gavin and Kydland (1999) calculated the cyclical properties of money and prices for the periods before and after the … inflation, the lag from money growth to inflation, and lag from money growth to nominal GDP growth. Generally, the monetary …-correlations between money growth and inflation. …