Albanesi, Stefania; Chari, V. V.; Christiano, Lawrence J. - In: Quarterly Review (2003) Sum, pp. 17-33
This study analyzes two monetary economies, a cash-credit good model and a limited-participation model. In these models, monetary policy is made by a benevolent policymaker who cannot commit to future policies. The study defines and analyzes Markov equilibrium in these economies and shows that...