## The Tobin effect and the Fisher relation

The optimizing models we examined in the previous section share the characteristic of considering a world that consists of a fixed number of large infinitely lived families. Each family makes a decision about how much to consume and save taking into account the welfare of all future generations. As a result the steady-state real interest rate is set according to a modified golden rule and depends only on the rates of time preference and population growth and not on any monetary variables. Thus,...

## Money in the utility and production function

The first formulation of a monetary growth model in an explicitly optimizing framework is due to Sidrauski 1967a . His formulation is based on Ramsey's classic 1928 paper on optimal savings behavior and as a result it resolves the objection to non-optimizing models. An infinitely-lived growing family maximizes the utility of its members by solving an intertemporal maximization problem. Money is introduced by assuming that in addition to consumption, utility is derived from the flow of services...

## Introduction

My main conclusion is that equally plausible models yield fundamentally different results, wrote Jerome Stein in the introduction of his 1970 survey of monetary growth theory. Two decades later all we have is more reasons for reaching the same conclusion. Is it possible to affect capital accumulation and output by actions that merely change the rate of growth of the stock of nominal money If there are such effects, will they be permanent, affecting steady-state outcomes, or merely transitory...