@article{Aiyagari:275590,
      recid = {275590},
      author = {Aiyagari, S. Rao and Eckstein, Zvi},
      title = {Interpreting Monetary Stabilization in a Growth Model with  Credit Goods Production},
      address = {1994-03},
      number = {2123-2018-4953},
      series = {Working Paper No. 8-1994},
      pages = {36},
      year = {1994},
      abstract = {This paper is motivated by observations concerning the  size of the banking sector and the growth rate of the  economy before and after successful stabilizations of high  inflations. The facts suggest that the relative size of the  banking sector increases during a period of accelerating  inflation and decreases immediately following a successful  monetary stabilization. Furthermore, the GDP growth rate is  lower during the high inflation period than after  stabilization. The goal of this paper is to develop a  monetary growth model which is qualitatively consistent  with these observations. The model we use is a variant of  the Lucas and Stokey [1987] model of cash and credit goods.  The main innovation in our model is that while cash goods  and credit goods are perfect substitutes in consumption we  posit different technologies for their production. We show  that the model's predictions on the impact of a permanent  stabilization are consistent with the main real and  monetary observations on high inflation countries.},
      url = {http://ageconsearch.umn.edu/record/275590},
      doi = {https://doi.org/10.22004/ag.econ.275590},
}