The effects of inflation are considered for a small open economy with overlapping generations and a cash-in-advance constraint on consumption. In an endowment economy with one good, the model recovers the adjustment mechanism underlying the monetary approach to the balance of payments, which...

This paper considers the implications of population mobility for risk sharing among individuals and among regions of a federation. There is an important interaction between risk sharing and interregional redistribution which precludes the regional authorities from fully exploiting gains from...

The effects of inflation are worked out for a small open economy with Cash-in-Advance (CIA) constraints on bond purchases. If all transactions are subject to CIA constraints, an increase in the inflation rate will reduce savings, bringing about a current account deficit, while the capital stock...