This paper demonstrates the effects of
modeling an endogenous rate of time preference and two cash-in-advance constraints.
If the constraint is levied on consumption and capital goods, time preference
effects are neutral and cash-in-advance constraint effects invert the Tobin
Effect. If the constraint applies solely to consumption goods, opposing motives
are offsetting and monetary policy is super neutral.
Cite this paper
E. Kam, "A Tale of Two Motives: Endogenous Time Preference, Cash-in-Advance Constraints and Monetary Policy," Modern Economy, Vol. 4 No. 6, 2013, pp. 427-430. doi: 10.4236/me.2013.46045.
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