Creator: Bental, Benjamin. and Eden, Benjamin. Series: Lucas expectations anniversary conference Abstract:
We propose a model in which an unanticipated reduction in the money supply leads to a contemporaneous increase in inventories followed by periods with lower output. This persistent real effect does not require price-rigidity or real shocks and confusion. It is obtained in a model in which markets are cleared and agents are price-takers.
Keyword: Productivity, Money supply, Money, and Supply Subject (JEL): E22 - Macroeconomics : Consumption, saving, production, employment, and investment - Capital ; Investment ; Capacity and E51 - Monetary policy, central banking, and the supply of money and credit - Money supply ; Credit ; Money multipliers
Creator: Bental, Benjamin. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Dept.) Number: 103 Keyword: Fixed point theorem, Equilibrium, Schauder's theorem, and Overlapping generations Subject (JEL): D58 - Computable and Other Applied General Equilibrium Models and C68 - Computable General Equilibrium Models