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Existing search-theoretical model of money have in general abstracted from the existence and accumulation of other assets, in particular, capital. In this paper we present a model where the optimal portfolio allocation decision of agents is explicitly modeled. Trade frictions in a decentralized...
Persistent link: https://www.econbiz.de/10005537421
One of the key variables for a bank's management is the development of the "risk-free interest rate", which is the reference for all bond and loan rates as well as an indicator for the state of the economy and therefore the bank"s future perspectives. Turning towards long-term analysis, the...
Persistent link: https://www.econbiz.de/10005537644
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We evaluate the Friedman-Schwartz hypothesis that a more accommodative monetary policy could have greatly reduced the severity of the Great Depression. To do this, we first estimate a dynamic, general equilibrium model using data from the 1920s and 1930s. Although the model includes eight...
Persistent link: https://www.econbiz.de/10005706566
Persistent link: https://www.econbiz.de/10005132814
n this paper we develop the Generalize Taylor Economy (GTE) in which there are many sectors with overlapping contracts of different lengths. We are able to show that even in economies with the same average contract length, monetary shocks will be more persistent when there are longer contracts....
Persistent link: https://www.econbiz.de/10005537478
The effects of changes in monetary policy are studied in a general equilibrium model where money facilitates transactions. Because there are two types of agents, workers and capitalists, different elasticities of money demand exist, implying that monetary policy influences the distribution of...
Persistent link: https://www.econbiz.de/10005537508
The issue of quantifying the empirical relevance of the different channels of transmissions through which monetary policy exerts its influence on demand, output and prices has received wide and increasing attention in recent years. In this paper we examine under which conditions the different...
Persistent link: https://www.econbiz.de/10005537779
Ramsey models of fiscal and monetary policy with perfectly-competitive product markets and a fixed supply of capital predict highly volatile inflation with no serial correlation. In this paper, we show that an otherwise-standard Ramsey model that incorporates capital accumulation and habit...
Persistent link: https://www.econbiz.de/10005706297
Persistent link: https://www.econbiz.de/10005132817