Some benefits of cyclical monetary policy

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