The optimum quantity of money rule in the theory of public finance
Abstract
This paper examines optimal tax policy in a monetary economy in which money serves
as an intermediate good that helps facilitate the conversion of scarce resources into
final consumption goods by enabling consumers to economize on the costs of transacting.
It is shown that in such an environment, even though distorting taxes must be levied
for revenue purposes, the optimal tax structure calls for abstaining from inflationary
finance and adopting the optimum quantity of money rule. © 1986.
Type
Journal articlePermalink
https://hdl.handle.net/10161/1978Published Version (Please cite this version)
10.1016/0304-3932(86)90040-1Publication Info
(1986). The optimum quantity of money rule in the theory of public finance. Journal of Monetary Economics, 18(3). pp. 277-284. 10.1016/0304-3932(86)90040-1. Retrieved from https://hdl.handle.net/10161/1978.This is constructed from limited available data and may be imprecise. To cite this
article, please review & use the official citation provided by the journal.
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Show full item recordScholars@Duke
Kent P. Kimbrough
Professor of Economics
Professor Kimbrough specializes in the fields of macroeconomics and international
economics. His latest research explores the revenue maximizing inflation rate, optimal
taxes and tariffs in the presence of private information, the welfare costs of inflation,
and interest rate rules and uniqueness in the presence of transactions costs. In
prior work he has investigated the macroeconomic effects of trade policy, the impact
of bilateral tariffs, foreign exchange controls and capital controls, the
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