The symmetry of real purchasing power and the neoclassical monetary growth model

John Z Drabicki, Akira Takayama

Research output: Contribution to journalArticle

5 Scopus citations


It has been argued that the usual instability property of the neoclassical monetary growth model can be removed if an asymmetric treatment of real purchasing power between the real and monetary sectors is eliminated, i.e., if the demand for money is made to depend on disposable income and not income. Basically, the argument is that this symmetry can offset the destabilizing forces of the Wicksell effect of the rate of inflation on the demand for money. We show that, under the usual stipulations of the model, the instability (saddle-point) nature of the model cannot be altered by such an argument.

Original languageEnglish (US)
Pages (from-to)357-362
Number of pages6
JournalJournal of Macroeconomics
Issue number3
Publication statusPublished - 1982


ASJC Scopus subject areas

  • Economics and Econometrics

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