Sunspot Bubbles

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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Year of publication:	2005
Authors:	Bosi, Stefano
Institutions:	Centre d'Études des Politiques Économiques (EPEE), Université d'Évry Val d'Essonne
Subject:	overlapping generations model \| bubbles \| cash-in-advance constraint \| sunspot equilibria

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Extent:	application/pdf
Series:	Documents de recherche.
Type of publication:	Book / Working Paper
Notes:	Number 05-25 17 pages
Classification:	D9 - Intertemporal Choice and Growth ; E4 - Money and Interest Rates ; G1 - General Financial Markets
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010655966