CONTENTS
PREFACE = xi
1 Survey of Developments in Money and Macroeconomics
1 Recent Developments in Monetary Theory(From Journal of Monetary Economics, 1976) / With Stanley Fischer = 3
Introduction = 3
The Theory of Money Demand = 4
Money, Inflation, and Growth = 10
The Welfare Cost of Inflation, the Optimum Quantity of Money, and Inflationary Finance = 13
Disequilibrium Theory = 16
The General Equilibrium Approach to Monetary Theory = 19
The New Microfoundations of Money = 21
Rational Expectations and the Phillips Curve = 25
Conclusions = 34
References = 34
2 The Equilibrium Approach to Business Cycles
2 The Equilibrium Approach to Business Cycles = 41
Equilibrium Business Cycle Theory = 41
Policy Implications = 55
Market Clearing = 60
Econometric Policy Evaluation = 61
Empirical Testing: Observational Equivalence Problems = 62
Some Invalid Testing Procedures = 67
Empirical Findings = 68
Concluding Comments = 73
References = 74
3 Rational Expectations and the Role of Monetary Policy(From Journal of Monetary Economics, 1976) = 79
Introduction = 79
A Rational Expectations Model with Imperfect Information = 80
Monetary Policy = 93
Conclusions = 103
Appendix 1 : Results When $$U_t$$, Is a First-Order Markov Process = 105
Appendix 2 : Systematic Growth in Money and Output = 107
References = 109
4 A Capital Market in an Equilibrium Business Cycle Model(From Econometrics, 1980) = 111
Setup of the Model = 113
Solution of the Model under Full Current Information = 123
Solution of the Model under Incomplete Current Information = 126
Concluding Remarks = 133
Appendix : Derivation of the Conditional Expectation of Money Growth = 133
References = 136
5 Unanticipated Money Growth and Economic Activity in the United States = 137
Analysis of Money Growth = 138
Analysis of the Unemployment Rate and Output = 142
Price Level Estimates = 159
Concluding Observations = 167
References = 168
3 Alternative Approaches to Macroeconomics
6 A General Disequilibrium Model of Income and Employment(From American Economic Review, 1971) / With Herschel I. Grossman = 173
Analytical Framework = 175
Patinkin's Analysis of the Labor Market = 176
The Concept of Unemployment = 177
Clower's Analysis of the Consumption Function = 178
General Disequilibrium Involving Excess Supply = 179
General Disequilibrium Involving Excess Demand = 181
Summary = 183
References = 184
7 Suppressed Inflation and the Supply Multiplier(From The Review of Economic Studies, 1974) / With Herschel I. Grossman = 185
Analytical Framework = 187
The Behaviour of Firms = 188
The Behaviour of Households under General Market Clearing = 189
The Behaviour of Households under Suppressed Inflation = 191
The Determination of Output and Employment under Suppressed Inflation = 195
Extensions of the Analysis of Household Behaviour = 199
Appendix = 200
References = 201
8 A Theory of Monopolistic Price Adjustment(From The Review of Economic Studies, 1972) = 203
Static Optimization Model = 204
Optimization Subject to Stochastic Demand = 207
Extensions of the Model = 211
References = 212
9 Long-Term Contracting, Sticky Prices, and Monetary Policy(From Journal of Monetary Economics, 1977) = 213
Introduction = 213
The Gray-Fischer Analysis = 214
The Employment Rule = 218
Incomplete Information = 221
Some Conclusions = 223
References = 224
4 Public Debt
10 Public Debt and Taxes(From Federal Tax Reform, 1978) = 227
Some Data on Public Debt = 228
Economic Effects of the Debt-Tax Choice = 230
Finite Lives and Related Matters = 232
Imperfect Private Capital Markets = 233
Uncertainty about Future Taxes = 234
Misperception of Future Taxes = 235
The Volume of Government Expenditure = 235
Public Debt and the Timing of Taxation = 236
The Burden of the Public Debt = 237
Fiscal Policy = 239
References = 240
11 Are Government Bonds Net Wealth?(From Journal of Political Economy, 1974) = 243
The Effect of Finite Lives-A Model with Overlapping Generations = 246
Imperfect Capital Markets = 258
A Government Monopoly in Liquidity Services = 260
Risk and Asset Substitutability = 261
Summary and Conclusions = 263
References = 264
12 On the Determination of the Public Debt(From Journal of Political Economy, 1979) = 267
A Model of Public Debt Issue = 268
Empirical Analysis = 281
Concluding Remarks = 296
References = 297
5 Money Demand and Related Topics
13 Inflation, the Payments Period, and the Demand for Money(From Journal of Political Economy, 1970) = 301
A Model of the Payments Period and the Demand for Money = 303
Empirical Results on Demand for Money during Hyperinflations = 325
Extensions of the Model = 331
Appendix = 332
References = 336
14 Household Money Holdings and the Demand Deposit Rate(From Journal ot Money, Cfedil, and Banking, 1972) / With Anthony M. Santomero = 337
Introduction = 337
The Rate of Return on Demand Deposits = 338
Theoretical Model of Household Demand for Money = 341
Empirical Study of Household Money Holdings = 345
Summary of Major Conclusions = 352
Literature Cited = 353
15 Money and the Price Level under the Gold Standard(From Economic Journal, 1979) = 355
The Gold Standard = 355
Other Commodity Standards = 369
Some Concluding Remarks = 373
Appendix = 374
