The optimum quantity of money rule in the theory of public finance

Journal Article (Journal Article)

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.

Full Text

Duke Authors

Cited Authors

  • Kimbrough, KP

Published Date

  • January 1, 1986

Published In

Volume / Issue

  • 18 / 3

Start / End Page

  • 277 - 284

International Standard Serial Number (ISSN)

  • 0304-3932

Digital Object Identifier (DOI)

  • 10.1016/0304-3932(86)90040-1

Citation Source

  • Scopus