Borrowing constraints and complex dynamics in an OLG framework
AbstractIn this paper we model an OLG economy à la Kiyotaki and Moore whose novel feature is the role of money as a store of value and of bequest as a source of funds to be "invested" in landholding. The dynamics generated by the model are generally characterized by irregular cyclical trajectories and, under special configuration of the parameters, a strange attractor appears. In this setting, an expansionary monetary policy may have a stabilizing role due to the interaction between money holding and the accumulation of borrowers' net worth.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Behavior & Organization.
Volume (Year): 72 (2009)
Issue (Month): 2 (November)
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Web page: http://www.elsevier.com/locate/jebo
Borrowing constraints Credit cycles Complex dynamics Monetary policy;
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