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In this paper, we present a dynamic optimizing model that allows explicitly for imperfect substitutability between different financial assets. This is specified in a manner which captures Tobin's (1969) view that an expansion of one asset's supply affects both the yield on that asset and the...
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, Eichenbaum, and Evans (2005). Our empirical estimates of the real side of the economy are similar whichever price adjustment …
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