Money and prices in models of bounded rationality

In this paper the authors explore the ability of simple monetary models with bounded rationality to account for the joint distribution of money and prices. They impose restrictions on the size of the mistakes agents can make in equilibrium and argue that countries with high inflation are likely to satisfy these restrictions. Their computations show that the model with bounded rationality does neither improve nor deteriorate the ability of the model to match the data.

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Year of publication:	2003
Authors:	Marcet, Albert ; Nicolini, Juan Pablo
Institutions:	Federal Reserve Bank of Atlanta
Subject:	Monetary policy \| Equilibrium (Economics) \| Macroeconomics

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Series:	Working Paper.
Type of publication:	Book / Working Paper
Notes:	Number 2003-15
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005401995