A Note on Endogenous Time Preference and Monetary Non-Superneutrality

Eric Kam (), Arman Mansoorian and John Smithin
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Arman Mansoorian: York University, Canada
John Smithin: York University, Canada

Working Papers from York University, Department of Economics

Abstract: We suggest a simple variant of Uzawa preferences which has the same predictions as his formulation, but is less prone to criticism. We assume that the rate of time preference is an increasing function of the total value of current financial assets. It is shown that an increase in the rate of money growth will initially reduce the real value of financial assets, reducing the rate of time preference, increasing savings and the steady state capital stock. This provides a restatement of the Mundell-Tobin effect in an optimizing framework.

Keywords: Monetary Non-Superneutrality; Time Preference; Financial Assets (search for similar items in EconPapers)
JEL-codes: F31 F32 F41 (search for similar items in EconPapers)
Pages: 11 pages
Date: 1998-04
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Persistent link: https://EconPapers.repec.org/RePEc:yca:wpaper:1998_04

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