{"title":"Wealth effects in a cash-in-advance economy","authors":"Eric Kam, Paul Missios","doi":"10.32920/ryerson.14639295","DOIUrl":null,"url":null,"abstract":"This paper examines the monetary growth implications of combining Stockman's\ncash−in−advance constraint on consumption and capital goods and an endogenous rate of\ntime preference that is an increasing function of real wealth. The cash−in−advance constraint\nimposes an investment tax that reduces steady state consumption and capital. However,\nendogenous time preference wealth effects link the real and monetary sectors to yield a\nMundell−Tobin effect. Cash−in−advance constraint effects dominate endogenous time\npreference wealth effects so that monetary growth reduces steady state capital and\nconsumption.","PeriodicalId":47355,"journal":{"name":"Economics Bulletin","volume":null,"pages":null},"PeriodicalIF":0.6000,"publicationDate":"2003-03-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"3","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economics Bulletin","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.32920/ryerson.14639295","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"Economics, Econometrics and Finance","Score":null,"Total":0}
引用次数: 3
Abstract
This paper examines the monetary growth implications of combining Stockman's
cash−in−advance constraint on consumption and capital goods and an endogenous rate of
time preference that is an increasing function of real wealth. The cash−in−advance constraint
imposes an investment tax that reduces steady state consumption and capital. However,
endogenous time preference wealth effects link the real and monetary sectors to yield a
Mundell−Tobin effect. Cash−in−advance constraint effects dominate endogenous time
preference wealth effects so that monetary growth reduces steady state capital and
consumption.
期刊介绍：
The Economic Bulletin is an open-access letters journal founded in 2001 with the mission of providing free and extremely rapid scientific communication across the entire community of research economists. EB publishes original notes, comments, and preliminary results. We are especially interested in publishingmanuscripts that keep the profession informed about on-going research programs. Our publication standard is that a manuscript be original, correct and of interest to a specialist. Submissions in these categories are refereed and our objective is to make a decision within two months. Accepted papers are published immediately. It is expected that in many cases, manuscripts published in these categories will form the foundation for more complete works to besubsequently submitted to other journals. In all cases, submissions are restricted to seven printed pages exclusive of references, tables, figures, and appendices, and must be in PDF format. EB also publishes non-refereed letters to the editor, conference announcements and research announcements.
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