Abstract
Proposition I Under Patinkin's assumptions on the money market [2, p. 491], assume that commodity demand responds only to changes in real interest rates (i.e., equal changes in nominal interest rates and the anticipated inflation rate, everything else held constant, will leave commodity demand unchanged). Then a reduced real demand for money (from an increase in the anticipated inflation rate) is accomodated exclusively by a shift in the excess demand function for bonds. Commodity market equilibrium at a fixed level of real output YO can be expressed, following Patinkin, as
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