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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
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.
- Alogoskoufis, George & van der Ploeg, Frederick, 1991.
"Money and Growth Revisited,"
CEPR Discussion Papers
532, C.E.P.R. Discussion Papers.
- Alogoskoufis, G.S. & Ploeg, F. van der, 1991.
"Debts, deficits and growth in interdependent economies,"
1991-4, Tilburg University, Center for Economic Research.
- Alogoskoufis, G.S. & Van Der Ploeg, F., 1991. "Debts, Deficits and Growth in Interdependent Economies," Papers 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.
- Barbara Annicchiarico, 2003.
"Fiscal Policy and Exchange Rates,"
CEIS Research Paper
7, Tor Vergata University, CEIS.
- 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.
- 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.
- 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.
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 you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.