Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/108067
Authors: 
Gillman, Max
Kejak, Michal
Year of Publication: 
2004
Series/Report no.: 
IEHAS Discussion Papers MT-DP - 2004/2
Abstract: 
The paper shows that contrary to conventional wisdom an endogenous growth economy with human capital and alternative payment mechanisms can robustly explain major facets of the long run inflation experience. A negative inflation-growth relation is explained, including a striking nonlinearity found re-peatedly in empirical studies. A set of Tobin (1965) effects are also explained and, further, linked in magnitude to the growth effects through the interest elasticity of money demand. Undis-closed previously, this link helps fill out the intuition of how the inflation experience can be plausibly explained in a robust fashion with a model extended to include credit as a payment mechanism.
Subjects: 
Human capital
cash-in-advance
interest-elasticity
credit production
JEL: 
O42
E31
E22
Document Type: 
Working Paper

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