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Inflation And Growth With The Miu Approach And The Equation Of Exchange

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  • WEI-BIN ZHANG

    (Ritsumeikan Asia Pacific University, Japan)

Abstract

The purpose of this paper is to study a relationship between growth and inflation on the basis of the Tobin growth model. We deviate from the Tobin approach by determining money demand with the money-in-utility (MIU) approach. The utility is affected by money holding. The utility function is applied by an alternative approach proposed by Zhang. The wealth accumulation a key determinant of economic growth. The government supplies money which is described by the traditional equation of exchange. The velocity of money is determined as a function of the rate of interest as in the Baumol-Tobin model. We build the dynamic model and simulate the motion of the model. We carry out comparative dynamic analysis in various parameters.

Suggested Citation

  • Wei-Bin Zhang, 2020. "Inflation And Growth With The Miu Approach And The Equation Of Exchange," Social Sciences and Education Research Review, Department of Communication, Journalism and Education Sciences, University of Craiova, vol. 7(1), pages 45-71, July.
    • Handle: RePEc:edt:jsserr:v:7:y:2020:i:1:p:45-71
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    More about this item

    Keywords

    inflation; Tobin growth model; equation of exchange; Baumol-Tobin model; MIU approach;
    All these keywords.

    JEL classification:

    • Z0 - Other Special Topics - - General

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