TY - JOUR
T1 - Transactions cost, endogenous labor, and the superneutrality of money
AU - Wang, Ping
AU - Yip, Chong K.
PY - 1991
Y1 - 1991
N2 - This paper develops a tractable perfect-foresight-shopping-time model with endogenous labor-leisure choice to investigate the superneutrality of money. Different from the existing literature, we examine the effects of money growth on both employment and capital accumulation. Under the lump-sum money transfer, we show that an increase in money growth rate unambiguously reduces steady-state capital, labor, leisure, consumption, and welfare, contrary to previous work. Since money is introduced into transaction effort technology via time allocation, the positive correlation between steady-state labor and leisure emerges.
AB - This paper develops a tractable perfect-foresight-shopping-time model with endogenous labor-leisure choice to investigate the superneutrality of money. Different from the existing literature, we examine the effects of money growth on both employment and capital accumulation. Under the lump-sum money transfer, we show that an increase in money growth rate unambiguously reduces steady-state capital, labor, leisure, consumption, and welfare, contrary to previous work. Since money is introduced into transaction effort technology via time allocation, the positive correlation between steady-state labor and leisure emerges.
UR - https://www.scopus.com/pages/publications/10444262450
U2 - 10.1016/0164-0704(91)90038-V
DO - 10.1016/0164-0704(91)90038-V
M3 - Article
AN - SCOPUS:10444262450
SN - 0164-0704
VL - 13
SP - 183
EP - 191
JO - Journal of Macroeconomics
JF - Journal of Macroeconomics
IS - 1
ER -