Seasonal Cycles and Endogenous Business Cycles in a Monetary Economy
AbstractThe purpose of this paper is to investigate how seasonal fluctuations in preference may change the dynamic stability and make multiple equilibria more likely outcome in a standard monetary economy. In the analysis, we investigate a model of money-in-the-utility function where real money balances held at the beginning of the period induce utility. Unless the utility function has seasonal patterns, the steady state equilibrium is a unique equilibrium unless the degree of risk aversion is incredibly large. However, when the utility function has some seasonal patterns, the dynamic system may have multiple dynamic paths or limit cycles even if the degree of risk aversion takes a reasonable value in most of the seasons. In particular, when the number of seasons is large, there may exist multiple dynamic paths even if the observed money demand is decreasing in interest rates.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-8.
Length: 25 pages
Date of creation: Jun 1998
Date of revision:
Contact details of provider:
Postal: Hongo 7-3-1, Bunkyo-ku, Tokyo 113-0033
Web page: http://www.cirje.e.u-tokyo.ac.jp/index.html
More information through EDIRC
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CIRJE administrative office).
If references are entirely missing, you can add them using this form.