0 all the money that is in use in a country --
1 the total amount of money in a particular economy at a particular time: --
Consistent with the early papers, we assume that the money supply grows at a constant rate > 1 (or falls, if < 1).
By contrast, in the model with propagation, the nominal price level increases much more slowly, lagging the increase in the money supply for many periods.
This addition would, however, make steady states (in the ensuing analyses) sensitive to permanent changes in the rate of devaluation or expansion of money supply.
This can be seen in the highly public battle over money supply growth.
As a normalization, it is assumed that the money supply grows linearly at rate 1 over time.
If strategies require increased spending, this can be financed by increasing taxes, borrowing or the money supply.
The model consists of three equations, relating such quantities as consumption, production, and the money supply.
However, in the initial period of the shock, the price level rises far less than the money supply.
