Modeling Monetary Economies

Assume that people face a lump-sum tax of T goods when old and a rate of expansion of the fiat […]

Assume that the utility function of people in the economy described in Exercise 3.6 is log (c1,t) + log (c2,t+1).

Describe the essential features of a model economy of rational people for which each of the following statements is true:

Consider an economy with a constant population of N = 1,000. Individuals are endowed with y = 20 units of

Suppose the monetary authority prints fiat money at the rate but now does not distribute the newly printed money as