Nonneutrality of Money in Dispersion: Hume Revisited
Gu Jin and
Tao Zhu ()
MPRA Paper from University Library of Munich, Germany
For a class of standard and widely-used preferences, a one-shot money injection in a standard matching model can induce a significant and persistent output response by dispersing the distribution of wealth. Decentralized trade matters for both persistence and significance. In the presence of government bonds the injection has a liquidity effect and the inflation rate right following the injection may be below the steady-state rate level.
Keywords: Nonneutrality; Money Injection; Phillips Curve; Nominal Rigidity (search for similar items in EconPapers)
JEL-codes: E31 E40 E5 E50 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-mac, nep-mon and nep-pay
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https://mpra.ub.uni-muenchen.de/79561/1/MPRA_paper_79561.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/81393/1/MPRA_paper_81393.pdf revised version (application/pdf)
Journal Article: NONNEUTRALITY OF MONEY IN DISPERSION: HUME REVISITED (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:79561
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