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Elderly Care and Multiple Monies

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  • Hajime Tomura

    (Faculty of Political Science and Economics, Waseda University)

Abstract

This paper presents an overlapping generations model in which old generations require specific services from young generations due to idiosyncratic shocks. An example of such services is elderly care. The model shows that a two-money system in which fiat money for such services is separated from that for the other types of goods and services can replicate the resource allocation in a one-money system with a fair insurance. For this result, it is necessary to prohibit old generations from exchanging different types of fiat monies in the two-money system. The model implies that the introduction of fiat money for elderly care reduces the real value of government bonds outstanding in the country.

Suggested Citation

  • Hajime Tomura, 2019. "Elderly Care and Multiple Monies," Working Papers 1909, Waseda University, Faculty of Political Science and Economics.
    • Handle: RePEc:wap:wpaper:1909
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    References listed on IDEAS

    as
    1. Kocherlakota, Narayana R., 2003. "Societal benefits of illiquid bonds," Journal of Economic Theory, Elsevier, vol. 108(2), pages 179-193, February.
    2. Aoki, Kosuke & Nakajima, Tomoyuki & Nikolov, Kalin, 2014. "Safe asset shortages and asset price bubbles," Journal of Mathematical Economics, Elsevier, vol. 53(C), pages 164-174.
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