We study an overlapping generations model where the level of confidence in money evolves endogenously as a function of aggregate real money balances. The economy can display multiple stationary equilibria where the aggregate bubble on money is stochastic and the level of confidence is partial. Steady states can be ranked by the degree of confidence, with more inefficiency being associated with less confidence. It is only under certain restrictions that the Golden Rule constitutes a steady state for the system. Autarky becomes unstable and complex dynamics such as cycles and chaos can emerge even under gross substitutability.

The real value of money under endogenous beliefs / Bertocchi, Graziella; Y., Wang. - In: JOURNAL OF ECONOMIC THEORY. - ISSN 0022-0531. - STAMPA. - 67:(1995), pp. 205-222.

The real value of money under endogenous beliefs

BERTOCCHI, Graziella;
1995

Abstract

We study an overlapping generations model where the level of confidence in money evolves endogenously as a function of aggregate real money balances. The economy can display multiple stationary equilibria where the aggregate bubble on money is stochastic and the level of confidence is partial. Steady states can be ranked by the degree of confidence, with more inefficiency being associated with less confidence. It is only under certain restrictions that the Golden Rule constitutes a steady state for the system. Autarky becomes unstable and complex dynamics such as cycles and chaos can emerge even under gross substitutability.
1995
67
205
222
The real value of money under endogenous beliefs / Bertocchi, Graziella; Y., Wang. - In: JOURNAL OF ECONOMIC THEORY. - ISSN 0022-0531. - STAMPA. - 67:(1995), pp. 205-222.
Bertocchi, Graziella; Y., Wang
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11380/303515
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