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- Title
Inflation Stabilisation with Durable Goods and Endogenous Time Preference.
- Authors
Mansoorian, Arman; Mohsin, Mohammed
- Abstract
We consider inflation stabilisation policies for a small open economy with an endogenous time preference when consumption exhibits durability. The time preference effect and the durability effect have competing influences on the adjustment of consumption expenditures, which will likely exhibit an initial boom followed by a recession. Further, inflation stabilisation leads to an increase in labour supply and a boom in investment and output. The country experiences a sharp deterioration in its net foreign asset position.
- Subjects
CONSUMER goods; CONSUMPTION (Economics); FOREIGN assets; LABOR supply; ECONOMIC policy; SAVINGS
- Publication
Economic Record, 2010, Vol 86, Issue 274, p342
- ISSN
0013-0249
- Publication type
Article
- DOI
10.1111/j.1475-4932.2009.00610.x