Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5062673 | Economics Letters | 2006 | 5 Pages |
Abstract
The money in utility model is re-considered to allow for habit forming preferences, in which habits develop over instantaneous utility from consumption and real money holdings. An increase in the inflation rate does not affect the steady state level of capital or consumption, but reduces the steady state levels of real money holdings and habits. The model has important off steady state dynamics.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Arman Mansoorian, Leo Michelis,