Active intermediation in a monetary overlapping generations economy1
AbstractThis paper establishes that the proÃ¯Â¿Â½t-seeking activities of private intermediaries can ensure Pareto eÃ¯Â¿Â½ciency in the standard pure-exchange monetary overlapping generations economy without the need for government monetary or Ã¯Â¿Â½scal policy intervention. Moreover, these proÃ¯Â¿Â½t-seeking activities are shown to rule out all aperiodic and kperiodic cycles for k greater than 2. Contrary to much recent work on intermediation, the proÃ¯Â¿Â½t opportunities that arise for intermediaries in this context are not due to assumed frictions or asymmetric information. Rather, they are due to the dynamic open-ended structure of the economy, which permits debt roll-over. (C) 1998 Elsevier Science B.V. All rights reserved.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Dynamics and Control.
Volume (Year): 22 (1998)
Issue (Month): 10 (August)
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Web page: http://www.elsevier.com/locate/jedc
Other versions of this item:
- Pingle, M. & Tesfatsion, Leigh S., 1998. "Active Intermediation in an Monetary Overlapping Generations Economy," Staff General Research Papers 1227, Iowa State University, Department of Economics.
- C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
- E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
- E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66, pages 467.
- Gale, David, 1973. "Pure exchange equilibrium of dynamic economic models," Journal of Economic Theory, Elsevier, vol. 6(1), pages 12-36, February.
- Balasko, Yves & Shell, Karl, 1980. "The overlapping-generations model, I: The case of pure exchange without money," Journal of Economic Theory, Elsevier, vol. 23(3), pages 281-306, December.
- Pingle, M. & Tesfatsion, Leigh S., 1998.
"Active Intermediation in Overlapping Generations Economies with Production and Unsecured Debt,"
Staff General Research Papers
1228, Iowa State University, Department of Economics.
- Pingle, Mark & Tesfatsion, Leigh, 1998. "Active Intermediation In Overlapping Generations Economies With Production And Unsecured Debt," Macroeconomic Dynamics, Cambridge University Press, vol. 2(02), pages 183-212, June.
- Pingle, Mark & Tesfatsion, Leigh S., 1998. "Active Intermediation in Overlapping Generations Economies with Production and Unsecured Debt," Staff General Research Papers 1953, Iowa State University, Department of Economics.
- Tesfatsion, Leigh, 2006. "Agent-Based Computational Modeling And Macroeconomics," Staff General Research Papers 12402, Iowa State University, Department of Economics.
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