Cash-in-Advance Constraints in the Diamond Overlapping Generations Model: Neutrality and Optimality of Monetary Policies
AbstractThis paper is a study of money in overlapping generations models with cash-in-advances constraints. The authors first offer a brief review of different features of the cash-in-advance constraint. Then they propose a general formulation and study the neutrality of money. The authors show that both neutrality and equilibrium dynamics depend on the form of the cash-in-advance constraint. They then show that optimal intergenerational resources sharing can be implemented through monetary transfers. Finally, the authors find that the Chicago Rule is implied by the optimal monetary. Copyright 1999 by Royal Economic Society.
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Bibliographic InfoArticle provided by Oxford University Press in its journal Oxford Economic Papers.
Volume (Year): 51 (1999)
Issue (Month): 3 (July)
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Other versions of this item:
- CRETTEZ, Bertrand & MICHEL, Philippe & WIGNIOLLE, Bertrand, 1998. "Cash-in-advance constraints in the diamond overlapping generations model: neutrality and optimality of monetary policies," CORE Discussion Papers 1998005, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Crettez, B. & Michel, P. & Wigniolle, B., 1997. "Cash-in-Advance Constraints in the Diamond Overlapping Generations Model: Neutrality and Optimality of Monetary Policies," Papiers d'Economie MathÃÂ©matique et Applications 97.52, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
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- Crettez, Bertrand & Michel, Philippe & Wigniolle, Bertrand, 2002. "Seigniorage and public good in an OLG model with cash-in-advance constraints," Research in Economics, Elsevier, vol. 56(4), pages 333-364, December.
- Michel, P. & Wigniolle, B., 2000.
"Temporary Bubbles in an Economy with Under-Accumulation,"
Papiers d'Economie MathÃÂ©matique et Applications
2000.91, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
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- Yanagihara, Mitsuyoshi & Lu, Chen, 2013. "Cash-in-advance constraint, optimal monetary policy, and human capital accumulation," Research in Economics, Elsevier, vol. 67(3), pages 278-288.
- Leopold von Thadden, 2004. "Active monetary policy, passive fiscal policy and the value of pure debt: some further monetarist arithmetic," Money Macro and Finance (MMF) Research Group Conference 2003 108, Money Macro and Finance Research Group.
- Luciano Fanti, 2012. "Fertility and money in an OLG model," Discussion Papers 2012/145, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
- Stefano Bosi, 2005. "Sunspot Bubbles," Documents de recherche 05-25, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
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"Monetary policy and redistribution: What can or cannot be neutralized with Mirrleesian taxes,"
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- Firouz Gahvari & Luca Micheletto, 2012. "Monetary Policy and Redistribution: What can or cannot be Neutralized with Mirrleesian Taxes," CESifo Working Paper Series 3711, CESifo Group Munich.
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- Tarishi Matsuoka, 2011. "Temporary Bubbles and Discount Window Policy," KIER Working Papers 802, Kyoto University, Institute of Economic Research.
- Firouz Gahvari, 2009. "Friedman Rule in a Model with Endogenous Growth and Cash-in-advance Constraint," CESifo Working Paper Series 2708, CESifo Group Munich.
- Basci, Erdem & Erdogan, Ayse M. & Saglam, Ismail, 2006. "Money, Tobin Effect, and Incerasing Returns," MPRA Paper 1904, University Library of Munich, Germany.
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