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

Peel, David (1979) On dynamic stability in monetary models which incorporate short- and long-run expectations of inflation in the demand for the money function. Economics Letters, 2 (2). pp. 131-136. ISSN 0165-1765

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