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dc.creatorHoelscher, Gregory Paul
dc.descriptionIncludes bibliographical references (leaves 129-132)en
dc.description.abstractUncertainty and its effects is a topic in economics that has received increasing attention in the last few years. One area of this topic that is becoming more important is the study of the cause and effects of inflation rate uncertainty. The term inflation rate uncertainty is used to imply that individuals can attach probabilities to all possible values of the future rate of inflation, and that no one possible value has a probability of one. This dissertation is an examination of a representative consumer-saver and a representative firm in the context of a Fisherian two period model with inflation rate uncertainty. The investment decision of a firm that is faced with a fixed nominal cost of borrowing and a random inflation rate is modelled. It is demonstrated that a risk averse firm invests more in a certain world than in a world with inflation rate uncertainty. Also, a firm with decreasing absolute risk aversion invests less as the degree of uncertainty increases. The dissertation also shows simple conditions under which a saver will save less as inflation rate uncertainty increases. The effect of uncertainty on the consumption-saving decision is decomposed graphically and mathematically into a risk substitution effect and an income risk effect. Although the models of the firm and the consumer are studied in terms of inflation rate uncertainty, the results will hold for the general case of rate of return uncertainty which is usually considered in the literature. The dissertation concludes with an illustration of how an IS-LM type model is affected by an assumption that inflation rate uncertainty is present. A simple money growth model with a random money growth rate that causes inflation rate uncertainty is also considered.en
dc.format.extentviii, 133 leaves : illustrationsen
dc.rightsThis thesis was part of a retrospective digitization project authorized by the Texas A&M University Libraries. Copyright remains vested with the author(s). It is the user's responsibility to secure permission from the copyright holder(s) for re-use of the work beyond the provision of Fair Use.en
dc.subject.classification1981 Dissertation H694
dc.subject.lcshSaving and investment--Effect of inflation onen
dc.subject.lcshInflation (Finance)en
dc.titleInflation rate uncertainty and its effects on saving and investmenten
dc.typeThesisen A&M Universityen of Philosophyen
dc.contributor.committeeMemberBattalio, Ray
dc.contributor.committeeMemberHwang, Hae-shin
dc.contributor.committeeMemberMeyer, Jack
dc.contributor.committeeMemberRose, Pete
dc.format.digitalOriginreformatted digitalen
dc.publisher.digitalTexas A&M University. Libraries

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