The Optimal Quantity of Money in Overlapping Generations Models and in Models with a Representative Consumer.

For modern macroeconomic theory the infinitely lived representative agent model and the overlapping generations model, are the two most important frameworks of analysis. Both models form a unified approach in the sense that they are competitive general equilibrium models. When it comes to monetary policy however both models give a different answer to the question of the optimal quantity of money. This paper takes a first step in comparing these two different results.