Money and Capital in Interdependent Economies with Overlapping Generations
AbstractA two-country optimizing model with capital accumulation, purchasing power parity, floating exchange rates, uncovered interest parity, perfect foresight, finite lives and population growth is analyzed. For the case of a zero birth rate, individuals are indifferent between tax finance and bond finance or money finance, so that Ricardian debt-neutrality and super-neutrality prevail. In general, a tax-financed increase in monetary growth leads to an interdependent Mundell-Tobin effect; that is, the world real interest rate falls and capital accumulation increases. A home monetary expansion leads in the long run to an increase in home consumption and net foreign assets. If the expansion occurs through open-market operations, money is super-neutral. Numerical methods are used to calculate the short-run and interim multipliers and to discuss the effects of imperfect substitution between home and foreign goods. Copyright 1991 by The London School of Economics and Political Science.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by London School of Economics and Political Science in its journal Economica.
Volume (Year): 58 (1991)
Issue (Month): 230 (May)
Contact details of provider:
Postal: Houghton Street, London WC2A 2AE
Phone: +44 (020) 7405 7686
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0013-0427
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Dai, Meixing, 1992. "Technological dependence and budgetary policy in an uncertain horizon model of small open economy," MPRA Paper 14003, University Library of Munich, Germany.
- Donald A. R. George (University of Edinburgh), 2013. "Rational Expectations Dynamics: A Methodological Critique," ESE Discussion Papers 217, Edinburgh School of Economics, University of Edinburgh.
- Alogoskoufis, George & van der Ploeg, Frederick, 1991.
"Money and Growth Revisited,"
CEPR Discussion Papers
532, C.E.P.R. Discussion Papers.
- Alogoskoufis, G.S. & Van Der Ploeg, F., 1991.
"Debts, Deficits and Growth in Interdependent Economies,"
9104, Tilburg - Center for Economic Research.
- Alogoskoufis, George & van der Ploeg, Frederick, 1991. "Debts, Deficits and Growth in Interdependent Economies," CEPR Discussion Papers 533, C.E.P.R. Discussion Papers.
- Alogoskoufis, G.S. & Ploeg, F. van der, 1991. "Debts, deficits and growth in interdependent economies," Discussion Paper 1991-4, Tilburg University, Center for Economic Research.
- Barbara Annicchiarico, 2006.
"Fiscal Policy and Exchange Rates,"
Journal of Economics,
Springer, vol. 89(2), pages 165-185, November.
- Groof, R.J. de & Tuijl, M.A. van, 1993. "The twin-debt problem in an interdependent world," Research Memorandum 588, Tilburg University, Faculty of Economics and Business Administration.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.