Calvo, Guillermo A; Vegh, Carlos A - In: Economic Journal 106 (1996) 439, pp. 1546-63
In high inflation countries, policymakers often end up paying interest on part of the money supply. Higher interest rates on money have been used as a disinflationary policy. This paper analyzes the effectiveness of such a policy in the context of a closed-economy, staggered-prices model. Both a...