Short-Run and Long-Run Effects of Changes in Money in a Random-Matching Model

Neil Wallace ()

Journal of Political Economy, 1997, vol. 105, issue 6, 1293-1307

Abstract: A random-matching model of money is used to deduce the effects of a once-for-all change in the quantity of money. It is shown that the change has short-run effects that are predominantly real and long-run effects that are in the direction of being predominantly nominal provided that the change is random and people learn its realization only with a lag. The change in the quantity of money comes about through a random process of discovery that does not permit anyone to deduce the aggregate amount discovered when the change actually occurs. Copyright 1997 by the University of Chicago.

Date: 1997
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Working Paper: Short-run and long-run effects of changes in money in a random matching model (1996)
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Persistent link: https://EconPapers.repec.org/RePEc:ucp:jpolec:v:105:y:1997:i:6:p:1293-1307

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