Sub-Optimality of the Friedman Rule in Townsends Turnpike and Limited Communication Models of money: Do finite lives and initial dates matter?

We construct an economy populated with infinitely-lived agents and show that the Friedman rule is suboptimal. We do that by showing that our economy and an overlapping generations model in which the Friedman rule is known to be suboptimal are homomorphic. We also discuss the importance of whether or not the economy has an initial date for this result.

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Year of publication:	2004-12-21
Authors:	Haslag, Joseph ; Bhattacharya, Joydeep ; Martin, Antoine
Institutions:	Economics Department, University of Missouri
Subject:	Friedman rule \| monetary policy \| overlapping generations \| turnpike

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 0415 18 pages longpgs.
Classification:	E31 - Price Level; Inflation; Deflation ; E51 - Money Supply; Credit; Money Multipliers ; E58 - Central Banks and Their Policies
Source:	RePEc - Research Papers in Economics

Persistent link: https://ebvufind01.dmz1.zbw.eu/10005628017