Journal Article

Recalculating Sargent and Wallace’s “Some Unpleasant Monetarist Arithmetic”

Abstract: This note revisits and extends the seminal analysis by Sargent and Wallace, originally framed in terms of money growth rates. Here, I reexamine their model through two complementary lenses, treating the policy instrument as either (i) a sequence of interest rates or (ii) a sequence of seigniorage. In the process, I revisit Sargent and Wallace’s “spectacular” example and offer a variant that strengthens their conclusions.

https://doi.org/10.21034/qr.4431

Bibliographic Information

Provider: Federal Reserve Bank of Minneapolis

Part of Series: Quarterly Review

Publication Date: 2024-11-13

Volume: 44

Issue: 3