Abstract
A random-matching model of money is used to deduce the effects of a once-for-all change in the quantity of money. It is shown that the change has short-run effects that are predominantly real and long-run effects that are in the direction of being predominantly nominal provided that the change is random and people learn its realization only with a lag. The change in the quantity of money comes about through a random process of discovery that does not permit anyone to deduce the aggregate amount discovered when the change actually occurs.
Original language | English (US) |
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Pages (from-to) | 1293-1307 |
Number of pages | 15 |
Journal | Journal of Political Economy |
Volume | 105 |
Issue number | 6 |
DOIs | |
State | Published - Dec 1997 |
All Science Journal Classification (ASJC) codes
- Economics and Econometrics