“Knightian Asset Bubbles and Fiat Money in General Equilibrium” Working Paper
نویسندگان
چکیده
منابع مشابه
Existence and Uniqueness of 'Money' in General Equilibrium: Natural Monopoly in the Most Liquid Asset
The monetary character of trade, use of a common medium of exchange, is shown to be an outcome of economic general equilibrium in the presence of transaction costs and market segmentation (in trading posts with a separate budget constraint at each transaction). Commodity money arises endogenously as the most liquid (lowest transaction cost) asset. Scale economies in transaction cost account for...
متن کاملGeneral equilibrium, wariness and efficient bubbles
Wary consumers overlook gains but not losses in remote sets of dates or states. As preferences are upper but not lower Mackey semi-continuous, Bewley’s (1972) [4] result on existence of equilibrium whose prices are not necessarily countably additive holds. Wariness is related to lack of myopia and to ambiguity aversion (and, therefore, to Bewley’s (1986) [6] work on Knightian uncertainty). Wary...
متن کاملThe Taxation of Saving Returns in Overlapping Generations Economies with Stochastic Asset Bubbles
In the standard simple overlapping generations model with production (Diamond (1965)), the steady state competitive equilibrium level of capital under laissez-faire does not typically maximize the net production if the agents can save only in terms of capital. In particular, whenever the steady state competitive equilibrium level of capital is too high, net production and consumption can be inc...
متن کاملTemporary bubbles in an economy with under-accumulation
This paper studies the equilibrium dynamics of an overlapping generations model with capital, money and cash-in-advance constraints. At each date the economy can experience two different regimes. In the first one the cash-inadvance constraint is binding and money is a dominated asset. In the second one, the constraint is strictly satisfied and money has the same return as capital. When the seco...
متن کاملLiquidity, Interest, and Asset Prices *
A stylized theory of money and central banking is added to a model of competitive equilibrium in asset markets to explain the determination of the general level of asset prices and interest rates. The cash-in-advance constraint provides a transactions demand for money, but this is not sufficient to guarantee the determinacy of the price level if liquidity is costless or the price level is uncer...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
عنوان ژورنال:
دوره شماره
صفحات -
تاریخ انتشار 2007