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Creator: Smith, Bruce D. (Bruce David), 1954-2002 Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 221 Abstract:
This paper considers a view commonly associated with the "quantity theory of money": that banks should face 100 percent reserve requirements. It argues first that the objectives of the quantity theorists' proposals were more than merely price level stability, and that in fact, price level stability was at most a secondary objective of their proposals. Second, it argues that these theorists had a world with distortions in mind with respect to their proposals. These are present in a special setting examined that (a) supports the imposition of 100 percent reserve requirements (on the basis of an unconstrained Pareto criterion), and (b) supports the view that these restrictions stabilize the price level and make its movements more "predictable."
Palavra-chave: Price level stability, Lending, Quantity theory, Loans, and Banks Sujeito: G28 - Financial Institutions and Services: Government Policy and Regulation and E31 - Price Level; Inflation; Deflation
Creator: Smith, Bruce D. (Bruce David), 1954-2002 Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 237 Abstract:
A model is presented in which governments can select real expenditure levels which are feasible, hut are sufficiently high that a balanced budget is impossible. Thus governments with large expenditures are committed to inflationary finance schemes. This is the case even though the governments in question have access to lump-sum taxes. In addition, the model can explain why poorer countries tend to make heavier use of the inflation tax than do wealthier countries, and can account for the existence of country-specific fiat monies.
Palavra-chave: Government expenditure, Inflationary finance, Real expenditures, Inflation tax, and Deficit Sujeito: H62 - National Deficit; Surplus, H50 - National Government Expenditures and Related Policies: General, and E31 - Price Level; Inflation; Deflation
Creator: Sargent, Thomas J. and Wallace, Neil Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 241 Palavra-chave: Seignorage, Real balances, Rational expectations, and Hyperinflations Sujeito: H27 - Taxation, Subsidies, and Revenues: Other Sources of Revenue and E31 - Price Level; Inflation; Deflation
Creator: Altug, Sumru Series: Working paper (Federal Reserve Bank of Minneapolis. Research Dept.) Number: 343 Descrição:
"These notes were... initially circulated as Federal Reserve Bank of Minneapolis Working Paper 343, 1987."
Palavra-chave: Money stock, Bubble, Phillip Cagan, Price bubbles, Currency reform, Real cash balances, Hyperinflation, and Price fluctuations Sujeito: E51 - Money Supply; Credit; Money Multipliers and E31 - Price Level; Inflation; Deflation
Creator: Smith, Bruce D. (Bruce David), 1954-2002 Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 406 Palavra-chave: Inflation, Money, Monetary policy, Prices, Quantity theory of money, and Central banking Sujeito: E31 - Price Level; Inflation; Deflation and E52 - Monetary Policy
Creator: Miller, Preston J. and Todd, Richard M. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 481 Abstract:
This paper investigates the effects of changes in a country's monetary policies on its economy and the welfare of its citizens and those of other countries. Each country is populated by two-period lived overlapping agents who reside in either a home service sector or a world-traded good sector. Policy effects are transmitted through changes in the real interest rate, relative prices, and price levels. Welfare effects are sometimes dominated by relative price movements and can thus be opposite of those found in one-good models. Simulation of dynamic paths also reveals that welfare effects for some types of agents reverse between those born in immediate post-shock periods and those born later.
Palavra-chave: Exchange rates, Real interest rates, Monetary policy, Prices, and Relative prices Sujeito: E31 - Price Level; Inflation; Deflation, F31 - Foreign Exchange, and E52 - Monetary Policy
Creator: Backus, David and Kehoe, Patrick J. Series: Conference on economics and politics Abstract:
We document properties of business cycles in ten countries over the last hundred years, contrasting the behavior of real quantities with that of the price level and the stock of money. Although the magnitude of output fluctuations has varied across countries and periods, relations among variables have been remarkably uniform. Consumption has generally been about as variable as output, and investment substantially more variable, and both have been strongly procydical. The trade balance has generally been countercyclical. The exception to this regularity is government purchases, which exhibit no systematic cyclical tendency. With respect to the size of output fluctuations, standard deviations are largest between the two world wars. In some countries (notably Australia and Canada) they are substantially larger prior to World War I than after World War II, but in others (notably Japan and the United Kingdom) there is little difference between these periods. Properties of price levels, in contrast, exhibit striking differences between periods. Inflation rates are more persistent after World War II than before, and price level fluctuations are typically procyclical before World War II, countercyclical afterward. We find no general tendency toward increased persistence in money growth rates, but find that fluctuations in money are less highly correlated with output in the postwar period.
Sujeito: E32 - Business Fluctuations; Cycles and E31 - Price Level; Inflation; Deflation
Creator: Geweke, John Series: New methods in business cycle research Abstract:
A simple stochastic model of the firm is constructed in which a dynamic monopolist who maximizes a discounted profits stream subject to labor adjustment costs and given factor prices sets output price as a distributed lag of past wages and input prices. If the observed relation of wages and prices in manufacturing arises solely from this behavior then wages and input prices are exogenous with respect to output prices. In tests using quarterly and monthly series for the straight time wage, an index of raw materials prices and the wholesale price index for manufacturing and its durable and nondurable subsectors this hypothesis cannot be refuted for the period 1955:1 to 1971:11. During the period 1926:1 to 1940:11, however, symmetrically opposite behavior is observed manufacturing wholesale prices are exogenous with respect to the wage rate, a relation which can arise if dynamically monopsonistic firms compete in product markets. Neither structural relation has withstood direct wage and price controls.
Palavra-chave: Wholesale, Labor, Wages, Prices, and Manufacturing Sujeito: E32 - Business Fluctuations; Cycles, E31 - Price Level; Inflation; Deflation, and L60 - Industry Studies: Manufacturing: General