11.21. Growth and seignorage, and an alternative explanation of the inflationgrowth relationship. (Friedman, 1971.) Suppose that money...

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11.21. Growth and seignorage, and an alternative explanation of the inflationgrowth relationship. (Friedman, 1971.) Suppose that money demand is given by ln (M/P) = a − bi + ln Y, and that Y is growing at rate gY. What rate of inflation leads to the highest path of seignorage?

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