We show that a one-sector AK model of endogenous growth with the most generalized cash-in-advance constraint is able to account for (i) the observed long-run negative relationship between the nominal growth rate of money and the income velocity of money, (ii) the empirically ambiguous effect of...

We show that a one-sector AK model of endogenous growth with the most generalized cash-in-advance constraint is able to account for (i) the observed long-run negative relationship between the nominal growth rate of money and the income velocity of money, (ii) the empirically ambiguous effect of...

It is well known that a high degree of relative risk aversion induces equilibrium indeterminacy in cash-in-advance economies. I find that by endogenously adjusting the nominal money supply to output fluctuations, these equilibria can be effectively eliminated.

This paper analyzes the role of variable work effort in inducing sunspot equilibria in real business cycle models. Not only is it demonstrated that variable workers' work intensity reduces the degree of increasing returns that is needed to generate indeterminacy but it is also shown that this...

It is well known that a high degree of relative risk aversion induces equilibrium indeterminacy in cash-in-advance economies. I find that by endogenously adjusting the nominal money supply to output fluctuations, these equilibria can be effectively eliminated.

This paper analyzes the role of variable work effort in inducing sunspot equilibria in real business cycle models. Not only is it demonstrated that variable workers' work intensity reduces the degree of increasing returns that is needed to generate indeterminacy but it is also shown that this...