Nonneutrality of Money in Dispersion: Hume Revisited

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.

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Year of publication:	2017-06-05
Authors:	Jin, Gu ; Zhu, Tao

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Type of publication:	Book / Working Paper
Language:	English
Notes:	Jin, Gu and Zhu, Tao (2017): Nonneutrality of Money in Dispersion: Hume Revisited.
Classification:	E31 - Price Level; Inflation; Deflation ; E40 - Money and Interest Rates. General ; E5 - Monetary Policy, Central Banking and the Supply of Money and Credit ; E50 - Monetary Policy, Central Banking and the Supply of Money and Credit. General
Source:	BASE

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