Purpose – The purpose of this paper is to derive the real implications of inflation targeting using optimizing models characterized by endogenous time preference. Design/methodology/approach – To ensure consistent consumption and savings behavior, the rate of time preference is modeled as an...

Purpose – The purpose of this paper is to derive the real implications of inflation targeting using optimizing models characterized by endogenous time preference. Design/methodology/approach – To ensure consistent consumption and savings behavior, the rate of time preference is modeled as an...

This paper demonstrates a robust proof of the continuous−time transformations of Stockman’s cash−in−advance constraints. When the constraint applies to consumption and capital purchases, monetary growth lowers steady state consumption and capital. When the constraint applies only to...

This paper provides a theoretical framework within which to examine issues of macroeconomic policy autonomy for the small open economy in an increasingly global international environment. We show that substantial policy leverage continues to exist provided that the jurisdictions concerned...

We suggest a simple variant of Uzawa preferences which has the same predictions as his formulation, but is less prone to criticism. We assume that the rate of time preference is an increasing function of the total value of current financial assets. It is shown that an increase in the rate of...

This model demonstrates a restatement of the Mundell-Tobin effect and monetary non-superneutrality using an infinitely lived, representative agent model. The rate of time preference is assumed to be an increasing function of the total value of current financial wealth. An increase in the...

This note provides an explanation of the relationship between the nominal and real lending rates of the commercial banks and central bank policy rates. It suggests that "a real interest rate rule" on the part of the central bank would influence the real lending rate perceived by commercial banks...

This paper demonstrates a robust proof of the continuous-time transformations of Stockman's cash-in-advance constraints. When the constraint applies to consumption and capital purchases, monetary growth lowers steady state consumption and capital. When the constraint applies only to consumption...