Asymmetric Liquidity Shocks and Optimality of the Freidman Rule

This article examines the optimality of the Freidman rule in an overlapping generations model with spatial separation, wherein asymmetric liquidity shocks are observed. Suboptimality of the Freidman rule is shown. Furthermore, when the number of locations is sufficiently large, there is no room for monetary policy to improve social welfare.

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Authors:	Ohtaki, Eisei
Institutions:	Tokyo Center for Economic Research (TCER)

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Notes:	10 pages
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011123044