Recalculating Sargent and Wallace’s “Some Unpleasant Monetarist Arithmetic”

Ivan Werning

Quarterly Review, 2024, vol. 44, issue 3

Abstract: This note revisits and extends the seminal analysis by Sargent and Wallace, originally framed in terms of money growth rates. Here, I reexamine their model through two complementary lenses, treating the policy instrument as either (i) a sequence of interest rates or (ii) a sequence of seigniorage. In the process, I revisit Sargent and Wallace’s “spectacular” example and offer a variant that strengthens their conclusions.

Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmqr:99083

DOI: 10.21034/qr.4431

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