A price discrimination analysis of monetary policy

John Bryant, Neil Wallace

Research output: Contribution to journalArticlepeer-review

45 Scopus citations


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 languageEnglish (US)
Pages (from-to)279-288
Number of pages10
JournalReview of Economic Studies
Issue number2
StatePublished - Apr 1984

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics


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