It is shown that the traditional specification of the revenue form money creation implies a retroactive inflation tax and leads to time inconsistency in monetary policy. The specification that leads to time consistency turns out to be Auernheimer s "honest government" seigniorage revenue.

The object of the model is to determine the number of squatters in a city. In the model, households with incomes below a certain threshold level of income choose to squat and households with incomes above that threshold choose not to squat. This threshold depends on the amount of land available...