Anticipated Inflation in a Neoclassical Growth Model with a Cash-in-advance Constraint
نویسنده
چکیده
Sufficient conditions for the long run non-superneutrality of money are established in a neoclassical growth model with a labor-leisure choice. Money is held to satisfy a cash-in-advance constraint on consumption purchases. Production requires capital and labor while period utility depends on consumption and leisure. Sufficient conditions for increased money growth to reduce output in the long run are: (1) the crosspartial derivative of the production function is non-negative (capital and labor are complements in production), and (2) the crosspartial derivative of the period utility function is non-negative (consumption and leisure are complements in utility).
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