TY  - JOUR
AU  - Alvarez,Fernando
AU  - Atkeson,Andrew
AU  - Edmond,Chris
TI  - On the Sluggish Response of Prices to Money in an Inventory-Theoretic Model of Money Demand
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10016
PY  - 2003
Y2  - October 2003
UR  - http://www.nber.org/papers/w10016
L1  - http://www.nber.org/papers/w10016.pdf
N1  - Author contact info:
Fernando E. Alvarez
University of Chicago
Department of Economics
1126 East 59th Street
Chicago, IL 60637
Tel: 773/702-4412
Fax: 773/702-8490
E-Mail: f-alvarez1@uchicago.edu

Andrew Atkeson
Bunche Hall 9381
Department of Economics
UCLA
Box 951477
Los Angeles, CA  90095-1477
Tel: 866/312-9770
Fax: 310/825-9528
E-Mail: andy@atkeson.net

Chris Edmond
Department of Economics
University of Melbourne
Parkville VIC 3010
AUSTRALIA
Tel: +61-3-8344-9733
Fax: +61-3-8344-6899
E-Mail: chris.edmond@gmail.com
AB  - We exposit the link between money, velocity and prices in an inventory-theoretic model of the demand for money and explore the extent to which such a model can account for the short-run volatility of velocity, the negative correlation of velocity and the ratio of money to consumption, and the resulting  stickiness' of the aggregate price level relative to a benchmark model with constant velocity. We find that an inventory-theoretic model of the demand for money is a natural framework for understanding these aspects of the dynamics of money, velocity and prices in the short run.
ER  -