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Superneutrality of Money under Open Market Operations

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  • Homburg Stefan

    (School of Economics and Management, Leibniz University of Hannover, Hannover, Germany)

Abstract

Monetary policy is superneutral in an overlapping generations model. Previous authors have argued that superneutrality does not hold in such a setting. However, the standard results rely on the counter-factual premise of helicopter money and are overturned if money creation through open market operations is taken into account. This result suggests that a more realistic representation of monetary policy may generally be helpful.

Suggested Citation

  • Homburg Stefan, 2015. "Superneutrality of Money under Open Market Operations," Review of Economics, De Gruyter, vol. 66(3), pages 289-302, December.
  • Handle: RePEc:lus:reveco:v:66:y:2015:i:3:p:289-302
    DOI: 10.1515/roe-2015-1003
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    References listed on IDEAS

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    Cited by:

    1. Stefan Homburg, 2017. "Understanding Benign Liquidity Traps: The Case of Japan," German Economic Review, Verein für Socialpolitik, vol. 18(3), pages 267-282, August.
    2. Homburg, Stefan, 2017. "A Study in Monetary Macroeconomics," OUP Catalogue, Oxford University Press, number 9780198807537.

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    More about this item

    Keywords

    superneutrality; open market operations; seigniorage; monetary policy; overlapping generations;
    All these keywords.

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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