Time Preference and Interest Rate in a dynamic general Equilibrium Model
AbstractThis paper reexamines the relationship between the time preference rate and the real interest rate in the neoclassical growth model by introducing Keynesian time preference. It is shown that the long-run behavior of the neoclassical growth model persists. When introduucing money by money-in-utility, money is superneutral and the optimal monetary policy is the Friedman rule.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 34063.
Date of creation: 01 Jan 2011
Date of revision:
Keynesian time preference; Monetary Superneutrality; Optimum Quantity of Money;
Find related papers by JEL classification:
- O42 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Monetary Growth Models
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-10-22 (All new papers)
- NEP-CIS-2011-10-22 (Confederation of Independent States)
- NEP-DGE-2011-10-22 (Dynamic General Equilibrium)
- NEP-MON-2011-10-22 (Monetary Economics)
- NEP-UPT-2011-10-22 (Utility Models & Prospect Theory)
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.:
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