TY  - BOOK
AU  - Aruoba,S.Boragan
AU  - Davis,Morris A.
AU  - Wright,Randall
ED  - National Bureau of Economic Research.
TI  - Homework in Monetary Economics: Inflation, Home Production, and the Production of Homes 
T2  - NBER working paper series
PY  - 2012///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - August 2012; Hardcopy version available to institutional subscribers
N2  - We study models incorporating money, household production, and investment in housing. Inflation, as a tax on market activity, encourages substitution into household production, and thus investment in household capital. Hence, inflation increases the (appropriately deflated) value of the housing stock. This is documented in various data sources. A calibrated model accounts for a fifth to a half of the observed relationships. While this leaves much to be explained, it demonstrates the channel is economically relevant. We also show models with home production imply higher costs of inflation than models without it, especially when home and market goods are close substitutes
UR  - https://www.nber.org/papers/w18276
UR  - http://dx.doi.org/10.3386/w18276
ER  -