A Comment on Reis
Author(s)
Kenji Miyazaki
ABSTRACT
This note gives a counterexample on Reis [1]. Using a certain family of utility functions, this note not only gives a sharper representation than that of Reis but also demonstrates that interest rate inelastic money demand does not lead to superneutrality. This implies that superneutrality does not exist when uncerinty is introduced.
This note gives a counterexample on Reis [1]. Using a certain family of utility functions, this note not only gives a sharper representation than that of Reis but also demonstrates that interest rate inelastic money demand does not lead to superneutrality. This implies that superneutrality does not exist when uncerinty is introduced.
KEYWORDS
Monetary Policy, Superneutrality, Nominal Interest Rate Policy, Perfect Complementary between Consumption and Money
Monetary Policy, Superneutrality, Nominal Interest Rate Policy, Perfect Complementary between Consumption and Money
Cite this paper
nullK. Miyazaki, "A Comment on Reis," Theoretical Economics Letters, Vol. 1 No. 3, 2011, pp. 91-94. doi: 10.4236/tel.2011.13019.
nullK. Miyazaki, "A Comment on Reis," Theoretical Economics Letters, Vol. 1 No. 3, 2011, pp. 91-94. doi: 10.4236/tel.2011.13019.
References
[1] R. Reis, “The Analytics of Monetary Non-Neutrality in the Sidrauski Model,” Economics Letters, Vol. 94, No. 1, 2007, pp. 129-135. doi:10.1016/j.econlet.2006.08.017 [2] M. Sidrauski, “The Rational Choice and Patterns of Gro- wth in a Monetary Economy,” American Economic Review, Vol. 57, No. 2, 1967, pp. 534-544. [3] A. Lioui and P. Poncet, “Monetary Non-Neutrality in the Sidrauski Model under Uncertainty,” Economics Letters, Vol. 100, No. 1, 2008, pp. 22-26. doi:10.1016/j.econlet.2007.10.023 [4] S. Fischer, “Capital Accumulation on the Transition Path in a Monetary Optimizing Model,” Econometrica, Vol. 47, No. 6, 1979, pp. 1433-1439. doi:10.2307/1914010 [5] R. E. Lucas Jr., “Inflation and Welfare,” Econometrica, Vol. 68, No. 2, 2000, pp. 247–274. doi:10.1111/1468-0262.00109
[1] R. Reis, “The Analytics of Monetary Non-Neutrality in the Sidrauski Model,” Economics Letters, Vol. 94, No. 1, 2007, pp. 129-135. doi:10.1016/j.econlet.2006.08.017 [2] M. Sidrauski, “The Rational Choice and Patterns of Gro- wth in a Monetary Economy,” American Economic Review, Vol. 57, No. 2, 1967, pp. 534-544. [3] A. Lioui and P. Poncet, “Monetary Non-Neutrality in the Sidrauski Model under Uncertainty,” Economics Letters, Vol. 100, No. 1, 2008, pp. 22-26. doi:10.1016/j.econlet.2007.10.023 [4] S. Fischer, “Capital Accumulation on the Transition Path in a Monetary Optimizing Model,” Econometrica, Vol. 47, No. 6, 1979, pp. 1433-1439. doi:10.2307/1914010 [5] R. E. Lucas Jr., “Inflation and Welfare,” Econometrica, Vol. 68, No. 2, 2000, pp. 247–274. doi:10.1111/1468-0262.00109