Production-Based Asset Pricing in Monetary Economies with Transactions Costs
In: Economica, Band 63, Heft 251, S. 427
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In: Economica, Band 63, Heft 251, S. 427
In: Journal of economic dynamics & control, Band 19, Heft 3, S. 569-597
ISSN: 0165-1889
In: Dynamic games and applications: DGA, Band 6, Heft 2, S. 157-160
ISSN: 2153-0793
In: Journal of Monetary Economics, Band 50, Heft 6, S. 1351-1373
In applied work in macroeconomics and finance, nonoptimal infinite horizon economies are often studied in which the state-space is unbounded. Important examples of such economies are single-sector growth models with production externalities, valued fiat money, monopolistic competition, and/or distortionary government taxation. Although sufficient conditions for existence and uniqueness of Markovian equilibrium are weIl known for the compact state space case, no similar sufficient conditions exist for unbounded growth. This paper provides such a set of sufficient conditions, and presents a computational algorithm that will prove asymptotically consistent when computing Markovian equilibrium.
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In: Bulletin of economic research, Band 47, Heft 3, S. 233-251
ISSN: 1467-8586
ABSTRACTThe paper describes a dynamic general equilibrium monetary economy with technological primitives that are consistent with the possibility of asymptotic equilibrium growth. The paper focuses on the relationship between equilibrium financing constraints on investment goods, transaction costs and economic growth. A generalized growth condition is derived that involves both monetary growth rates and transaction costs. The condition is used to show that (i) although inflation taxes can potentially exert a negative influence on long‐run economic growth, these growth effects cannot in general be arbitrarily large; and (ii) for some monetary growth rates, money is superneutral in contrast to the models of Stockman and Abel. Numerical work indicates that although the welfare and growth effects of decreasing nominal interest rates from a benchmark are large, the costs associated with raising nominal interest rates from benchmark are not.
In: Journal of Monetary Economics, Band 35, Heft 3, S. 413-430
In: Economica, Band 62, Heft 245, S. 109
In: The Economic Journal, Band 104, Heft 426, S. 1123
In: Economica, Band 59, Heft 235, S. 351