A price discrimination analysis of monetary policy

John Bryant; Neil Wallace

doi:10.2307/2297692

A price discrimination analysis of monetary policy

John Bryant, Neil Wallace

Economics

Research output: Contribution to journal › Article › peer-review

46 Scopus citations

Abstract

Monetary policy is analysed within a model that appeals to legal restrictions on private intermediation to explain the coexistence of currency and interest-bearing default-free bonds. The interaction between such legal restrictions and monetary policy is illustrated in a version of the overlapping generations model. The model shows that legal restrictions and the use of both currency and bonds permit the government to levy a nonlinear inflation tax and that such a tax may be better in terms of the Pareto criterion than a linear inflation tax.

Original language	English (US)
Pages (from-to)	279-288
Number of pages	10
Journal	Review of Economic Studies
Volume	51
Issue number	2
DOIs	https://doi.org/10.2307/2297692
State	Published - Apr 1984

All Science Journal Classification (ASJC) codes

Economics and Econometrics

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10.2307/2297692

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title = "A price discrimination analysis of monetary policy",

abstract = "Monetary policy is analysed within a model that appeals to legal restrictions on private intermediation to explain the coexistence of currency and interest-bearing default-free bonds. The interaction between such legal restrictions and monetary policy is illustrated in a version of the overlapping generations model. The model shows that legal restrictions and the use of both currency and bonds permit the government to levy a nonlinear inflation tax and that such a tax may be better in terms of the Pareto criterion than a linear inflation tax.",

author = "John Bryant and Neil Wallace",

note = "Funding Information: This research was supported by the Federal Reserve Bank of Minneapolis. However, the views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of Minneapolis or the Federal Reserve System. An earlier and longer version appeared as a Bank Staff Report, Bryant and Wallace (1983).",

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A price discrimination analysis of monetary policy

Abstract

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