Minimum Consumption Requirements and Cycles in an Overlapping Generations Model of Money
This paper studies a pure-exchange monetary overlapping generations economy in which young and old agents face exogenous minimum consumption requirements, and money is the only asset. The presence of the minimum consumption requirement on the old is shown to produce multiperiodic monetary equilibria in which real balances cycle forever between "momentary" equilibrium points (those which generate monetary sequences that potentially violate equilibrium strictures asymptotically).
|Date of creation:||26 Jul 2007|
|Contact details of provider:|| Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070|
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06-02, Cornell University, Center for Analytic Economics.
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Staff General Research Papers Archive
12405, Iowa State University, Department of Economics.
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- Erkki Koskela & Mikko Puhakka, 2006. "Cycles and Indeterminacy in Overlapping Generations Economies with Stone-Geary Preferences," CESifo Working Paper Series 1737, CESifo Group Munich.
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