Hysteresis in Dynamic General Equilibrium Models with Cash-in-Advance Constraints
In this paper, we investigate equilibrium cycles in dynamic general equilibrium models with cash-in-advance constraints. Our findings are two-fold. First, in such models, if an equilibrium cycle exists, then there also exists a continuum of equilibrium cycles in its neighborhood. Second, the limit cycle, to which a dynamic path converges, varies continuously according to the initial distribution of the money holdings. Thus, temporary shocks that affect the initial distribution have permanent effects in such models; that is, such models exhibit hysteresis. Furthermore, we also explore the logic behind the results.
|Date of creation:||Oct 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.cirje.e.u-tokyo.ac.jp/index.html
More information through EDIRC
References listed on IDEAS
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.:
- Blanchard, Olivier J. & Summers, Lawrence H., 1987.
"Hysteresis in unemployment,"
European Economic Review,
Elsevier, vol. 31(1-2), pages 288-295.
- Ruilin Zhou, 1996.
"Individual and Aggregate Real Balances in a Random Matching Model,"
GE, Growth, Math methods
9612001, EconWPA, revised 23 Dec 1996.
- Zhou, Ruilin, 1999. "Individual and Aggregate Real Balances in a Random-Matching Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(4), pages 1009-38, November.
- Ruilin Zhou, 1996. "Individual and aggregate real balances in a random matching model," Staff Report 222, Federal Reserve Bank of Minneapolis.
- Akihiko Matsui & Takashi Shimizu, 2005. "A Theory Of Money And Marketplaces," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(1), pages 35-59, 02.
- Kazuya Kamiya & Takashi Shimizu, 2007.
"On The Role Of Tax Subsidy Scheme In Money Search Models,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(2), pages 575-606, 05.
- Kazuya Kamiya & Takashi Shimizu, 2005. "On the Role of Tax-Subsidy Scheme in Money Search Models," CIRJE F-Series CIRJE-F-323, CIRJE, Faculty of Economics, University of Tokyo.
- Edward J. Green & Ruilin Zhou, 2000.
"Dynamic monetary equilibrium in a random-matching economy,"
Working Paper Series
WP-00-1, Federal Reserve Bank of Chicago.
- Edward J. Green & Ruilin Zhou, 2002. "Dynamic Monetary Equilibrium in a Random Matching Economy," Econometrica, Econometric Society, vol. 70(3), pages 929-969, May.
- Lucas, Robert E, Jr, 1980. "Equilibrium in a Pure Currency Economy," Economic Inquiry, Western Economic Association International, vol. 18(2), pages 203-20, April.
- Kamiya, Kazuya & Shimizu, Takashi, 2006.
"Real indeterminacy of stationary equilibria in matching models with divisible money,"
Journal of Mathematical Economics,
Elsevier, vol. 42(4-5), pages 594-617, August.
- Kazuya Kamiya & Takashi Shimizu, 2005. "Real Indeterminacy of Stationary Equilibria in Matching Models with Divisible Money," CIRJE F-Series CIRJE-F-390, CIRJE, Faculty of Economics, University of Tokyo.
- Kiyotaki, Nobuhiro & Wright, Randall, 1989. "On Money as a Medium of Exchange," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 927-54, August.
- Olivier J. Blanchard & Lawrence H. Summers, 1986.
"Hysteresis and the European Unemployment Problem,"
NBER Working Papers
1950, National Bureau of Economic Research, Inc.
- Mitra, Tapan & Nishimura, Kazuo, 2001. "Discounting and Long-Run Behavior: Global Bifurcation Analysis of a Family of Dynamical Systems," Journal of Economic Theory, Elsevier, vol. 96(1-2), pages 256-293, January.
- Richard Baldwin, 1988.
"Hysteresis In Import Prices: The Beachhead Effect,"
NBER Working Papers
2545, National Bureau of Economic Research, Inc.
- Kazuya Kamiya & Takashi Shimizu, 2013. "Dynamic Auction Markets with Fiat Money," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(2-3), pages 349-378, 03.
- Edward J. Green & Ruilin Zhou, 1996.
"A Rudimentary Random-Matching Model with Divisible Money and Prices,"
GE, Growth, Math methods
9606001, EconWPA, revised 25 Jul 1996.
- Green, Edward J. & Zhou, Ruilin, 1998. "A Rudimentary Random-Matching Model with Divisible Money and Prices," Journal of Economic Theory, Elsevier, vol. 81(2), pages 252-271, August.
- Franz, Wolfgang, 1990. "Hysteresis in economic relationships: An overview," Discussion Papers, Series II 104, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
- Franz, Wolfgang, 1990. "Hysteresis in Economic Relationships: An Overview," Empirical Economics, Springer, vol. 15(2), pages 109-25.
When requesting a correction, please mention this item's handle: RePEc:tky:fseres:2010cf765. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CIRJE administrative office)
If references are entirely missing, you can add them using this form.