Money and inventories in an economy with uncertain and sequential trade

Benjamin Bental; Benjamin Eden

doi:10.1016/0304-3932(96)01263-9

Money and inventories in an economy with uncertain and sequential trade

Research output: Contribution to journal › Article › peer-review

Abstract

We propose a model in which an unanticipated reduction in the money supply leads to a contemporaneous increase in inventories followed by periods with lower output. This persistent real effect does not require price rigidities or real shocks and confusion. It is obtained in a model of uncertain and sequential trade, in which markets are cleared and agents are price takers.

Original language	English
Pages (from-to)	445-459
Number of pages	15
Journal	Journal of Monetary Economics
Volume	37
Issue number	3
DOIs	https://doi.org/10.1016/0304-3932(96)01263-9
State	Published - Jun 1996
Externally published	Yes

Keywords

Inventories
Money
Neutrality
Sequential trade

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/0304-3932(96)01263-9

Cite this

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abstract = "We propose a model in which an unanticipated reduction in the money supply leads to a contemporaneous increase in inventories followed by periods with lower output. This persistent real effect does not require price rigidities or real shocks and confusion. It is obtained in a model of uncertain and sequential trade, in which markets are cleared and agents are price takers.",

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AU - Eden, Benjamin

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AB - We propose a model in which an unanticipated reduction in the money supply leads to a contemporaneous increase in inventories followed by periods with lower output. This persistent real effect does not require price rigidities or real shocks and confusion. It is obtained in a model of uncertain and sequential trade, in which markets are cleared and agents are price takers.

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KW - Money

KW - Neutrality

KW - Sequential trade

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U2 - 10.1016/0304-3932(96)01263-9

DO - 10.1016/0304-3932(96)01263-9

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EP - 459

JO - Journal of Monetary Economics

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ER -

Money and inventories in an economy with uncertain and sequential trade

Abstract

Keywords

ASJC Scopus subject areas

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