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-advance constraints a la Champ and Freeman and Hahn and Solow. We first offer a brief review of different features of the cash-in-advance constraint. Then we propose a general formulation. We show that neutrality of money prevails when the ratios of lum-sum monetary transfers and public expenditures to the money supply do not depend on the money growth rate.
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Bibliographic InfoPaper provided by UniversitÃ© PanthÃ©on-Sorbonne (Paris 1) in its series Papiers d'Economie MathÃ©matique et Applications with number 97.52.
Length: 29 pages
Date of creation: 1997
Date of revision:
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MONEY ; MONETARY POLICY ; GENERATIONS;
Other versions of this item:
- Crettez, Bertrand & Michel, Philippe & Wigniolle, Bertrand, 1999. "Cash-in-Advance Constraints in the Diamond Overlapping Generations Model: Neutrality and Optimality of Monetary Policies," Oxford Economic Papers, Oxford University Press, vol. 51(3), pages 431-52, July.
- 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).
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
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- Lise Clain-Chamosset-Yvrard & Thomas Seegmuller, 2012.
"Rational Bubbles and Macroeconomic Fluctuations. The(De-)Stabilizing Role of Monetary Policy,"
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- Gahvari, Firouz & Micheletto, Luca, 2012. "Monetary policy and redistribution: What can or cannot be neutralized with Mirrleesian taxes," Working Paper Series, Center for Fiscal Studies 2012:5, Uppsala University, Department of Economics.
- MICHEL, Philippe & WIGNIOLLE, Bertrand, 2000.
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- 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).
- 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.
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