Money Cycles


Autoria(s): Clausen, Andrew; Strub, Carlo
Data(s)

10/04/2015

10/04/2015

01/09/2014

Resumo

Operating overheads are widespread and lead to concentrated bursts of activity. To transfer resources between active and idle spells, agents demand financial assets. Futures contracts and lotteries are unsuitable, as they have substantial overheads of their own.We show that money – under efficient monetary policy – is a liquid asset that leads to efficient allocations. Under all other policies, agents follow inefficient “money cycle” patterns of saving, activity, and inactivity. Agents spend their money too quickly – a “hot potato effect of inflation”. We show that inflation can stimulate inefficiently high aggregate output.

Identificador

http://hdl.handle.net/10943/630

Idioma(s)

en

Publicador

University of Edinburgh

Relação

SIRE DISCUSSION PAPER;SIRE-DP-2015-42

Tipo

Working Paper