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|Title:||Money as a medium of exchange and monetary growth in an underdevelopment context||Authors:||Kapur, B.K.||Issue Date:||Mar-1975||Citation:||Kapur, B.K. (1975-03). Money as a medium of exchange and monetary growth in an underdevelopment context. Journal of Development Economics 2 (1) : 33-48. ScholarBank@NUS Repository.||Abstract:||This paper constructs a neoclassical monetary growth model applicable to less developed economies, in that (1) the economy is assumed to be labour-surplus (as a result of which its steady-state growth rate is an endogenous variable), and (2) differential savings propensities on the part of profit- and wage-earners are postulated. The model predicts that an increase in the rate of monetary expansion increases the steady-state rate of inflation, increases the capital-labour ratio, reduces the money-labour ratio, and reduces the steady-state growth rate. Because of this last-mentioned fact, an inflationary policy is held to be unfavorable to economic development, despite the fact that it increases the capital-labour ratio. Some implications of the analysis for the well-known 'choice of techniques' problem are also discussed. © 1975.||Source Title:||Journal of Development Economics||URI:||http://scholarbank.nus.edu.sg/handle/10635/132315||ISSN:||03043878|
|Appears in Collections:||Staff Publications|
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