The Demand for Quality-adjusted Cash Balances: Price Uncertainty in the U.S. Demand for Money Function.
This paper investigates the importance of uncertainty regarding the rate of price change as an argument in the long-run money demand function. Increased inflation uncertainty is assumed to lower the stream of monetary services yielded by a given level of real cash balances. The effects on money dema...
| Publicado en: | Journal of Political Economy Vol. 85; no. 4; pp. 691 - 716 |
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| Formato: | Artículo |
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University of Chicago Press
Aug77
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=hlh&AN=5206135&site=ehost-live header: @attributes: shortDbName: hlh uiTerm: 5206135 longDbName: Humanities International Complete uiTag: AN controlInfo: bkinfo: jinfo: jid: 00223808 JPE jtl: Journal of Political Economy issn: 00223808 maglogo: N pubinfo: dt: Aug77 vid: 85 iid: 4 pid: 415 pub: University of Chicago Press artinfo: ui: 5206135 10.1086/260596 ppf: 691 ppct: 25 formats: tig: atl: The Demand for Quality-adjusted Cash Balances: Price Uncertainty in the U.S. Demand for Money Function. aug: au: Klein, Benjamin su: Demand for money Prices United States sug: subj: United States Demand for money Prices ab: This paper investigates the importance of uncertainty regarding the rate of price change as an argument in the long-run money demand function. Increased inflation uncertainty is assumed to lower the stream of monetary services yielded by a given level of real cash balances. The effects on money demand of such changes in the "quality" of money are, in general, theoretically indeterminate. If it is assumed, however, that the monetary service flow is proportional to the real money stock and that the demand for money is interest inelastic, then the predicted relationship between price uncertainty and money demand is unambiguously positive. The empirical findings of this paper, where price uncertainty is operationally measured by the variability of the rate of price change, strongly confirm this positive relationship. These results have important implications for the theory of inflation, the optimum quantity of money, and the potential government tax revenue from money creation. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: Y dt: @attributes: year: 1977 holdings: @attributes: islocal: N |
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