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Velocity and Monetary Expansion in a Growing Economy with Interest-Rate Control

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  • Seiya Fujisaki

    (Graduate School of Economics, Osaka University)

Abstract

We analyze the income velocity of money in an endogenous growth model with an interest-rate control rule and a cash-in-advance (CIA) constraint. We show that the long-term relationship between the income velocity of money and the nominal growth rate of money supply depends not only on the form of the CIA constraint but also on the central bank fs stance of interest-rate control rule.

Suggested Citation

  • Seiya Fujisaki, 2009. "Velocity and Monetary Expansion in a Growing Economy with Interest-Rate Control," Discussion Papers in Economics and Business 09-09, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:0909
    as

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    File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/0909.pdf
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    References listed on IDEAS

    as
    1. Suen, Ming-Hon & Yip, Chong K., 2005. "Superneutrality, indeterminacy and endogenous growth," Journal of Macroeconomics, Elsevier, vol. 27(4), pages 579-595, December.
    2. Chen, Shu-Hua & Guo, Jang-Ting, 2008. "Velocity of money, equilibrium (in)determinacy and endogenous growth," Journal of Macroeconomics, Elsevier, vol. 30(3), pages 1085-1096, September.
    3. Qinglai Meng & Chong Yip, 2004. "Investment, interest rate rules, and equilibrium determinacy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 23(4), pages 863-878, May.
    4. repec:ebl:ecbull:v:5:y:2008:i:13:p:1-7 is not listed on IDEAS
    5. Jang-Ting Guo & Shu-Hua Chen, 2008. "On the growth and velocity effects of money," Economics Bulletin, AccessEcon, vol. 5(13), pages 1-7.
    6. repec:ebl:ecbull:v:5:y:2007:i:11:p:1-7 is not listed on IDEAS
    7. Taylor, John B., 1993. "Discretion versus policy rules in practice," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 195-214, December.
    8. Kazuo Mino & Seiya Fujisaki, 2007. "Generalized Taylor Rule and Determinacy of Growth Equilibrium," Economics Bulletin, AccessEcon, vol. 5(11), pages 1-7.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    velocity; an interest-rate control; endogenous growth; cash-in-advance constraint;
    All these keywords.

    JEL classification:

    • O42 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Monetary Growth Models
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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