Document Type

Article

Abstract

This chapter conducts a Ramsey analysis within an endogenous growth cashin-advance economy with policy commitment. Credit and money are alternative payment mechanisms that act as inputs into the household production of exchange. The credit is produced with a diminishing returns technology with Inada conditions that implies along the balanced-growth path a degree one homogeneity of effective banking time. This tightens the restrictions found within shopping time economies while providing a production basis for the Ramsey-Friedman optimum that suggests a special case of Diamond and Mirrlees (1971).

Publication Date

4-23-2009

Publication Title

Inflation Theory in Economics: Welfare, Velocity, Growth and Business Cycles

First Page

80

Last Page

98

DOI

10.4324/9780203880180

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