MONEY, INFLATION AND CAPITAL ACCUMULATION

Kim Heng Tan ()
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Kim Heng Tan: Nanyang Business School, Nanyang Technological University, Singapore 639798, Singapore

The Singapore Economic Review (SER), 2001, vol. 46, issue 02, 179-193

Abstract: This paper shows that increasing the rate of monetary growth increases the capital-labor ratio in the long run when the initial inflation rate is low but decreases the capital-labor ratio when the inflation rate is high. This paper provides a theoretical justification for the empirical result by Bullard and Keating (1996) that inflation has positive real effects for low-inflation countries in the long run but negative effects for higher-inflation countries.

Keywords: Money; Inflation; Seigniorage; Capital accumulation (search for similar items in EconPapers)
Date: 2001
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DOI: 10.1142/S021759080100036X

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