A Clower constraint model of unbacked money

  • Bryant J
  • 3


    Mendeley users who have this article in their library.
  • 1


    Citations of this article.


The stylized monetary facts - (1) money growth causes inflation, (2) inflation is bad, (3) money demand depends upon the nominal interest rate, (4) the real interest rate equals a parametrically fixed rate of time preference, and (5) investment depends upon the real interest rate - are produced in a Grandmont-Younes modified Clower constraint model of money. Inflation is distorting, but is no one's intertemporal rate of substitution. Inflation discourages trade, but not investment. As a by-product the Friedman hypothesis, that the optimal deflation equals the rate of time preference, is confirmed in the model. © 1985.

Get free article suggestions today

Mendeley saves you time finding and organizing research

Sign up here
Already have an account ?Sign in

Find this document


  • John Bryant

Cite this document

Choose a citation style from the tabs below

Save time finding and organizing research with Mendeley

Sign up for free