Bubbles and money holding can reabsorb capital overaccumulation and restore the MGR in exogenous growth OLG economies. In contrast, under productive externalities and endogenous growth, bubbles and monetary saving can worsen an already inefficient underaccumulation. Under a simple credit market imperfection, we prove that bubbles can fluctuate around a bubbly balanced growth path as sunspot equilibria with shortrun effects on the saving rate.
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- Crettez, B. & Michel, P. & Wigniolle, B., 1997.
"Cash-in-Advance Constraints in the Diamond Overlapping Generations Model: Neutrality and Optimality of Monetary Policies,"
Papiers d'Economie MathÃ©matique et Applications
97.52, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
- Crettez, Bertrand & Michel, Philippe & Wigniolle, Bertrand, 1999. "Cash-in-Advance Constraints in the Diamond Overlapping Generations Model: Neutrality and Optimality of Monetary Policies," Oxford Economic Papers, Oxford University Press, vol. 51(3), pages 431-52, July.
- CRETTEZ, Bertrand & MICHEL, Philippe & WIGNIOLLE, Bertrand, 1998. "Cash-in-advance constraints in the diamond overlapping generations model: neutrality and optimality of monetary policies," CORE Discussion Papers 1998005, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Parent, Antoine & Rault, Christophe, 2004. "The Influences Affecting French Assets Abroad Prior to 1914," The Journal of Economic History, Cambridge University Press, vol. 64(02), pages 328-362, June.
- Bertocchi, Graziella, 1991. "Bubbles and inefficiencies," Economics Letters, Elsevier, vol. 35(2), pages 117-122, February.
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