Monetary Theory: Inflation, Interest, and Growth in the World Economy - Hardcover

Inhaltsangabe

The point of departure of Mundell's analysis in Part 1 is Metzler's famous diagrammatical representation of the general-equilibrium determination of the rate of intrerest and price level in a full-employment economy. With the aid of this diagram Metzler made a fruitful distinction between the impact of a monetary change generated by deficit financing (which is neutral in its effects) and that generated by an open-market purchase (which, in Metzler's analysis, is not). In his first chapter, Mundell very insightfully demonstrates that this difference is not inherent in the open-market operation as such, but depends on whether or nor the taxes used to finance the interest payment on government debt are capitalized by the taxpayers.

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