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Chan-Lau, Jorge A.

Monetary Policy in a Small Open Economy with Credit Goods Production Jorge A Chan-Lau. [electronic resource] / Jorge A Chan-Lau. - Washington, D.C. : International Monetary Fund, 1998. - 1 online resource (19 p.) - IMF Working Papers; Working Paper ; No. 98/153 . - IMF Working Papers; Working Paper ; No. 98/153 .

The paper analyzes the effects of monetary policy in a dynamic model of a small open economy with cash and credit goods production, where government consumption is financed by seignorage. It shows that the interrelationships between the growth rate of the monetary aggregate and the technological properties of the economy have an important bearing on the existence and uniqueness of equilibrium, the optimal inflation rate, and the occurrence of explosive hyperinflations. In consequence, the paper concludes that monetary policy does matter in the long run.

ISBN: 1451922442 : 15.00 USD

ISSN: 1018-5941

Standard No.: 10.5089/9781451922448.001 doi

Subjects--Topical Terms:
Cash Goods
Credit Goods
Inflation Rate
Monetary Aggregate
Nominal Interest Rate
Small Open Economy