Endogenous Time Preference in Monetary Growth Model

Been-Lon Chen, Yu-Shan Hsu and Chia-Hui Lu
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Yu-Shan Hsu: Department of Economics, National Chung Cheng University

No 10-A005, IEAS Working Paper : academic research from Institute of Economics, Academia Sinica, Taipei, Taiwan

Abstract: We study the otherwise standard growth model with money except endogenous time preferences determined by resources pent on imagining future pleasures along the line of Becker and Mulligan (1997). Money plays a role in transactions via the cash-in-advance constraint.The resulting steady-state condition can be simplified to the standard textbook diagram in terms of two loci. We analyze the relationship between monetary growth and capital accumulation. If spending on imagining future pleasures is not constrained by cash, the existing relationship no longer holds. The optimum quantity of money is studied.

Keywords: endogenous time preferences; growth; money (search for similar items in EconPapers)
JEL-codes: E22 E31 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2010-09
New Economics Papers: this item is included in nep-dge, nep-fdg, nep-mac and nep-mon
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