The Optimum Quantity of Money Revisited: Distortionary Taxation in a Search Model of Money

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The Optimum Quantity of Money Revisited: Distortionary Taxation in a Search Model of Money

This paper incorporates a distortionary tax into a microfoundations of money framework and revisits the optimum quantity of money. The money constraint in the decentralized market plays a key role in the optimal policy. Only if the constraint is binding can fiscal policy alter the agents’ surplus shares; monetary, but not fiscal, policy affects the agents’ bargaining position, leaving a special...

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ژورنال

عنوان ژورنال: The B.E. Journal of Macroeconomics

سال: 2010

ISSN: 1935-1690

DOI: 10.2202/1935-1690.1835