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- Title
THE ROLE OF MONEY IN A SIMPLE GROWTH MODEL.
- Authors
Levhari, David; Patinkin, Don
- Abstract
The article focuses on the role of money in a simple growth model. Increasing attention has been devoted in the recent literature to the role of money in growth models. In Part I of this paper Tobin's basic analysis of this question is summarized. Then it is shown that this analysis is deficient in that it does not really assign a meaningful role to money-either as a consumer's or a producer's good. Parts II and III of the article then analyze models in which money is assumed to fulfill these respective functions. The main concern in this paper will be with comparative dynamics, that is, with the analysis of the effects of different monetary policies on the steady-state or long-run-equilibrium properties of the model. The analysis of this paper has been presented as dealing with the effects of the rate of monetary expansion on the growth path of the system. Tobin's analysis model introduces a government which spends a fixed proportion of the national income, and which finances this expenditure either by levying taxes or by printing money.
- Subjects
MATHEMATICAL models of economic development; MONEY; CONSUMER goods; MONETARY policy; CONSUMPTION (Economics); NATIONAL income; PUBLIC spending
- Publication
American Economic Review, 1968, Vol 58, Issue 4, p713
- ISSN
0002-8282
- Publication type
Article