A Course in Monetary Economics Sequential Trade, Money, and Uncertainty [Hardcover]

Monetary Economics and Sequential Trade is an insightful introduction to the advanced topics in monetary economics. Accessible to students who have mastered the diagrammatic tools of economics, it discusses real issues with a variety of modeling alternatives, allowing for a direct comparison of the implications of the different models. The exposition is clear and logical, providing a solid foundation in monetary theory and the techniques of economic modeling. The text is rooted in the author's years of teaching and research, and will be highly suitable for monetary economics courses in both the upper-level undergraduate and graduate levels.

Preface xiii

Part I: Introduction to Monetary Economics 1

1 Overview 5

1.1 Money, Inflation, and Output: Some Empirical Evidence 5

1.2 The Policy Debate 8

1.3 Modeling Issues 13

1.4 Background Material 14

1.4.1 The Fisherian diagram 15

1.4.2 Efficiency and distortive taxes 18

1.4.3 Asset pricing 21

2 Money in the Utility Function 26

2.1 Motivating the Money in the Utility Function Approach: The Single-period, Single-agent Problem 26

2.2 The Multi-period, Single-agent Problem 28

2.3 Equilibrium with Constant Money Supply 33

2.4 The Social and Private Cost for Accumulating Real Balances 34

2.5 AdministrativeWays of Getting to the Optimum 36

2.6 Once and for All Changes in M 36

2.7 Change in the Rate of Money Supply Change: Technical Aspects 37

2.8 Change in the Rate of Money Supply Change: Economics 38

2.9 Steady-state Equilibrium (SSE) 41

2.10 Transition from One Steady State to Another 41