Inflation Theory in Economics: Welfare, Velocity, Growth and Business Cycles [Paperback]

These essays bring together a progression in monetary theory. The major theme that runs through all of the chapters is that in order to do monetary economics well in general equilibrium, it helps to have a good money demand underlying the theory.

A proper underlying money demand sets up arguably the best foundation from which to make extensions of monetary economics from the basic model. At the same time that money demand is modelled, this also endogenizes the velocity of money. This has been a challenge in the literature that these essays solve and then use to extend basic neoclassical growth and business cycle theory. Solving this problem, in a way that is a natural, direct, and micro-founded extension of the standard monetary theory is the first major contribution of the collection. The second major contribution is the extension of the neoclassical monetary models, using this solution, to reinvigorate classic issues of monetary economics and take them to the frontier.

1. Overview Part I: Inflation and Welfare 2. The Welfare Costs of Inflation in a Cash in Advance Model with Costly Credit  3. A Comparison of Partial and General Equilibrium Estimates of the Welfare Cost of Inflation  4. The Optimality of a Zero Inflation Rate: Australia 5. On the Optimality of Restricting Credit: Inflation-Avoidance and Productivity 6. Ramsey-Friedman Optimality within a Banking Time Economy Part II: Money Demand and Velocity  7. The Demand for Bank Reserves and Other Monetary Aggregates  8. Money Velocity with Costly Credit  9. Money Demand in General Equilibrium Endogenous Growth: Estimating the Role of a Variable Interest Elasticity  10. Money Demand in an EU Accession Country: A VECM Study of Croatia Part III: Inflation and Growth  11. Inflation and Balanced-Pathlƒ+