- 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.
- Federal Reserve Bank of Minneapolis. Research Department.
Downloadable ContentDownload PDF
Download a zip file that contains all the files in this work.