=+1. In the Cagan model, if the money supply is expected to grow at some constant rate

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=+1. In the Cagan model, if the money supply is expected to grow at some constant rate m

(so that Emt+s = mt + sm), then Equation A9 can be shown to imply that pt = mt + m.

a. Interpret this result.

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Macroeconomics

ISBN: 9781429240024

8th Edition

Authors: N Gregory Mankiw

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