This paper addresses whether the Friedman rule can be optimal in an economy in which the Tobin effect is operative. We present an overlapping generations economy with capital in which limited communication and stochastic relocation create an endogenous transaction role for fiat money. We assume...

In this article, Joseph Haslag surveys both the theoretical results and the empirical evidence relating inflation to per capita real GDP growth. Theory yields mixed results: a permanent change in inflation can raise, lower, or have no impact on per capita output or its rate of growth. The...

Some economists advocate focusing less emphasis on monetary aggregates because the relationship of monetary aggregates to the ultimate goals of monetary policy is less reliable now than in the past. But the stability of the relationship between money growth and inflation is a testable...

Recently, economists have examined the monetarist and the expectations-augmented Phillips-curve models of inflation to determine which model is a better predictor of the inflation rate. These studies raise an important question: Does money growth contain information that is useful in predicting...