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On the Sluggish Response of Prices to Money in an Inventory-Theoretic Model of Money Demand / Fernando Alvarez, Andrew Atkeson, Chris Edmond.
- Format:
- Book
- Author/Creator:
- Alvarez, Fernando.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w10016.
- NBER working paper series no. w10016
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2003.
- Summary:
- We exposit the link between money, velocity and prices in an inventory-theoretic model of the demand for money and explore the extent to which such a model can account for the short-run volatility of velocity, the negative correlation of velocity and the ratio of money to consumption, and the resulting stickiness' of the aggregate price level relative to a benchmark model with constant velocity. We find that an inventory-theoretic model of the demand for money is a natural framework for understanding these aspects of the dynamics of money, velocity and prices in the short run.
- Notes:
- Print version record
- October 2003.
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