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Most Downloaded Articles
- Comparing Wealth Effects: The Stock Market versus the Housing Market by Case, Karl E./ Quigley, John M. and Shiller, Robert J.
- Who Gets the Credit? And Does It Matter? Household vs. Firm Lending Across Countries by Beck, Thorsten/ Büyükkarabacak, Berrak/ Rioja, Felix K. and Valev, Neven T.
- Monetary and Macroprudential Policy Rules in a Model with House Price Booms by Kannan, Prakash/ Rabanal, Pau and Scott, Alasdair M.
- Is Discretionary Fiscal Policy in Japan Effective? by Rafiq, Sohrab
- In search of lost time: the neoclassical synthesis by De Vroey, Michel and Duarte, Pedro Garcia
Another Example in which Lump-sum Money Creation is Beneficial
1Penn State University, firstname.lastname@example.org
2Penn State University, email@example.com
Citation Information: Advances in Macroeconomics. Volume 1, Issue 1, Pages –, ISSN (Online) 1534-6013, DOI: 10.2202/1534-6013.1001, February 2001
- Published Online:
A probabilistic version of lump-sum money creation is studied in a random matching model with indivisible money and individual holdings bounded at 2 units. Sufficient conditions are obtained for an ex ante optimum from among implementable steady states to involve lump-sum creation of money. The role of that creation is to change the distribution of money holdings to permit more trade to occur. Beneficial money creation is impossible in a version with a 1 unit upper bound on individual holdings, but can almost certainly happen for all higher bounds.