Inflation, Interest Rates, and Welfare
构建了一个包含资本市场的货币经济一般均衡模型，发现通货膨胀会提高货币流通速度、降低实际利率，并指出最大化实际货币余额的货币政策是最优的。
This paper develops a simple general equilibrium model of a monetary economy with a capital market. Money demand arises from a "cash-in-advance" constraint rather than from any direct role in the utility function, and uncertainty gives rise to a meaningful portfolio choice between money and bonds. We show that velocity is increasing in the rate of inflation, and that the optimal monetary policy is that which maximizes real balances. We also show that the real rate of interest is not invariant to monetary, policy: inflation lowers the real rate.