Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5098659 | Journal of Economic Dynamics and Control | 2013 | 25 Pages |
Abstract
The paper builds a model that features spatial differentiation of markets, and then uses it to study, first, the relationship between inflation and the steady-state level of output, and second, the relationship between inflation and the steady-state distribution of output across the economy. A steady-state of the model entails a stationary distribution of money across the locations of the economy. With all else held fixed, a change in the rate of money-growth induces a change in the distribution of money, which leads to a change in labour supply and production throughout the economy. Thus the distribution of money provides a channel through which a change in monetary policy affects real economic activity.
Related Topics
Physical Sciences and Engineering
Mathematics
Control and Optimization
Authors
Niels Anthonisen,