Government Financing and Interest Rates in a Three Assets Sidrauski-based Model
AbstractIn this paper we formulate a Sidrauski-based model with three assets in which we introduce public bonds into the utility function of agents, with the purpose of analyzing some related questions with regards to the consequences of the financial activity of the government and the determination of the interest rates. The results obtained permit us to conclude that, within this framework: 1.-financial decisions of government will not influence the steady state levels of consumption and capital, and 2.-the inflation rate affects the real interest rate on bonds negatively.
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Bibliographic InfoPaper provided by EconWPA in its series Macroeconomics with number 0004017.
Length: 12 pages
Date of creation: 29 Jun 2000
Date of revision:
Note: Type of Document - Acrobat PDF; prepared on IBM PC ; to print on A4 paper; pages: 12
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Government Financing; Money Demand; Inflation Rate; Interest Rates; Sidrauski Model.;
Find related papers by JEL classification:
- E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
- E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-02-14 (All new papers)
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