Some benefits of cyclical monetary policy

Ricardo Cavalcanti and Ed Nosal

No 511, Working Papers (Old Series) from Federal Reserve Bank of Cleveland

Abstract: In this paper, we present a simple random-matching model in which different seasons translate into different propensities to consume and produce. We find that the cyclical creation and destruction of money is beneficial for welfare under a wide variety of circumstances. Our model of seasons can be interpreted as providing support for the creation of the Federal Reserve System, with its mandate of supplying an elastic currency for the nation.

Keywords: Monetary policy; Money supply (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-cba, nep-dge, nep-mac and nep-mon
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Citations: View citations in EconPapers (13)

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Related works:
Journal Article: Some benefits of cyclical monetary policy (2009)
Working Paper: Some benefits of cyclical monetary policy (2005)
Working Paper: Some benefits of cyclical monetary policy (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedcwp:0511

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DOI: 10.26509/frbc-wp-200511

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