Some benefits of cyclical monetary policy

Ed Nosal and Ricardo Cavalcanti

No 159, 2004 Meeting Papers from Society for Economic Dynamics

Abstract: Should monetary policy be cyclical? The debate around this question is old but has benefited very little from research on the pure theory of money. In our model, people trade in pairs, without double coincidence of wants and face seasonal fluctuations. Monetary policy is restricted to taxing money holdings in one period and redistributing in the next period the proceeds in a lump sum fashion. We demonstrate that under some very general conditions the cyclical creation and destruction of money is benefical to society

Keywords: seasonal fluctuations; money creation and destruction (search for similar items in EconPapers)
JEL-codes: E40 E50 (search for similar items in EconPapers)
Date: 2004
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Related works:
Journal Article: Some benefits of cyclical monetary policy (2009)
Working Paper: Some benefits of cyclical monetary policy (2005)
Working Paper: Some benefits of cyclical monetary policy (2005)
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