Monetary equilibria over an infinite horizon
Money provides liquidity services through a cash-in-advance constraint. The exchange of commodities and assets extends over an infinite horizon under uncertainty and a sequentially complete asset market. Monetary policy sets the path of rates of interest and accommodates the demand for balances through open market operations or loans. A public authority, which, most pertinently, inherits a strictly positive public debt, raises revenue from taxes and seignorage, and it distributes possible budget surpluses to individuals through transfers. Competitive equilibria exist, under mild solvency conditions. But, for a fixed path of rates of interest, there is a non-trivial multiplicity of equilibrium paths of prices of commodities. Determinacy requires that, subject to no-arbitrage and in addition to rates of interest, the prices of state-contingent revenues be somehow determined. Copyright Springer-Verlag Berlin/Heidelberg 2005
Volume (Year): 25 (2005)
Issue (Month): 1 (01)
|Contact details of provider:|| Web page: http://www.springer.com|
|Order Information:||Web: http://www.springer.com/economics/economic+theory/journal/199/PS2|
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.:
- BLOISE, Gaetano & DRÈZE, Jacques & POLEMARCHAKIS, Heracles, 2002.
"Money and indeterminacy over an infinite horizon,"
CORE Discussion Papers
2002021, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Magill, M. & Quinzii, M., 1993.
"Infinite Horizon Incomplete Markets,"
9320, Southern California - Department of Economics.
- Magill, M. & Quinzii, M., 1992. "Infinite Horizon Incomplete Markets," Papers 413a, California Davis - Institute of Governmental Affairs.
- Magill, M. & Quinzii, M., 1992. "Infinite Horizon Incomplete Markets," DELTA Working Papers 92-26, DELTA (Ecole normale supérieure).
- Magill,Michael & Quinzii,Martine, 1992. "Infinite horizon,Incomplete markets," Discussion Paper Serie A 384, University of Bonn, Germany.
- Magill,Michael & Quinzii,Martine, 1989.
"Real effects of money in general equilibrium,"
Discussion Paper Serie A
232, University of Bonn, Germany.
- Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66, pages 467.
When requesting a correction, please mention this item's handle: RePEc:spr:joecth:v:25:y:2005:i:1:p:51-74. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.