TIME COST OF TRANSACTIONS AND THE SUPERNEUTRALITY OF MONEY: A REFORMULATION OF THE STOCKMAN-ABEL CASH-IN-ADVANCE MODEL UNDER RECURSIVE PREFERENCES

抄録

This paper shows, under recursive preferences, that if a cash-in-advance constraint is formulated along the Baumol-Tobin transactions theory of liquidity preferences by considering leisure-transaction time tradeoffs, the Stockman-Abel cash-in-advance model becomes equivalent to the Sidrauski type money-in-the-utility-function model in its implications on the superneutrality of money. If such tradeoffs are extended to include production hours, a new dichotomy emerges in the sense that the effect of money growth on steady state capital intensity depends on the extent to which the marginal productivity of capital and the rate of time preference are affected.