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Stochastic inflation affects the risk characteristics, measured by the equity premium and the correlation of the equity’s return with consumption, in a fundamental way. The riskiness of a dollar-denominated asset depends on two conditional covariances: the covariance of the marginal rate of...
Persistent link: https://www.econbiz.de/10005372834
We examine the responses of prices and inflation to monetary shocks in an inventory-theoretic model of money demand. We …
Persistent link: https://www.econbiz.de/10005367677
Persistent link: https://www.econbiz.de/10005526369
We seem to observe different patterns of exchange at different times and in different places. The first goal of this paper is to develop a model of money as a medium of exchange which allows multiple transaction patterns. A dynamic version of Shubik’s trading post economy is used, and it is...
Persistent link: https://www.econbiz.de/10005526390
This paper is motivated by empirical observations on the comovements of currency velocity, inflation, and the relative size of the credit services sector. We document these comovements and incorporate into a monetary growth model a credit services sector that provides services that help people...
Persistent link: https://www.econbiz.de/10005498467
This is a note on the analysis of inflation and taxation in Cooley and Hansen’s cash-in-advance economy described in their paper “The Welfare Costs of Moderate Inflations.” Basic issues concerning the costs and consequences of inflation are considered, their results are assessed, and some...
Persistent link: https://www.econbiz.de/10005498493
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We study economies where government currency and electronic money, drawn from interest bearing deposits in private financial intermediary institutions, are full substitutes. We analyze the impact of competition on policy outcomes under different assumptions regarding: the objectives of the...
Persistent link: https://www.econbiz.de/10005372836
The effects of stochastic inflation on equity prices and the equity premium are studied in a pure-endowment asset …
Persistent link: https://www.econbiz.de/10005372856