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is inefficiently provided, inside money competition plays a disciplinary role by providing an upper bound on equilibrium … inflation rates. Furthermore, if Furthermore, if 'inside monies' can be produced at a sufficiently low cost, outside money is … efficient and inside money competition plays no role"--Federal Reserve Bank of Chicago web site …
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"Why is inflation persistently high in some periods and low in others? The reason may be absence of commitment in monetary policy. In a standard model, absence of commitment leads to multiple equilibria, or expectation traps, even without trigger strategies. In these traps, expectations of high...
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