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On dynamic stability in monetary models which incorporate short- and long-run expectations of inflation in the demand for the money function

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Published
<mark>Journal publication date</mark>1979
<mark>Journal</mark>Economics Letters
Issue number2
Volume2
Number of pages6
Pages (from-to)131-136
Publication StatusPublished
<mark>Original language</mark>English

Abstract

The demand for money function should depend on the long-run rate of inflation. A model of macroeconomic fluctuations based on short-run unanticipated inflation is used, together with adaptive expectations to develop conditions for price stability. It is shown that Cagan's conditions are neither necessary nor efficient