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Borrowing constraints and complex dynamics in an OLG framework

Listed author(s):
  • Assenza, Tiziana
  • Agliari, Anna
  • Delli Gatti, Domenico
  • Santoro, Emiliano

In this paper we model an OLG economy à la Kiyotaki and Moore whose novel feature is the role of money as a store of value and of bequest as a source of funds to be "invested" in landholding. The dynamics generated by the model are generally characterized by irregular cyclical trajectories and, under special configuration of the parameters, a strange attractor appears. In this setting, an expansionary monetary policy may have a stabilizing role due to the interaction between money holding and the accumulation of borrowers' net worth.

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File URL: http://www.sciencedirect.com/science/article/pii/S0167-2681(09)00190-5
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Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 72 (2009)
Issue (Month): 2 (November)
Pages: 656-669

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Handle: RePEc:eee:jeborg:v:72:y:2009:i:2:p:656-669
Contact details of provider: Web page: http://www.elsevier.com/locate/jebo

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