Time Preference and Interest Rate in a dynamic general Equilibrium Model

This paper reexamines the relationship between the time preference rate and the real interest rate in the neoclassical growth model by introducing Keynesian time preference. It is shown that the long-run behavior of the neoclassical growth model persists. When introduucing money by money-in-utility, money is superneutral and the optimal monetary policy is the Friedman rule.

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Year of publication:	2011-01-01
Authors:	Wang, Gaowang
Institutions:	Volkswirtschaftliche Fakultät, Ludwig-Maximilians-Universität München
Subject:	Keynesian time preference \| Monetary Superneutrality \| Optimum Quantity of Money

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Extent:	application/pdf
Series:	MPRA Paper.
Type of publication:	Book / Working Paper
Classification:	O42 - Monetary Growth Models ; E31 - Price Level; Inflation; Deflation ; E5 - Monetary Policy, Central Banking and the Supply of Money and Credit
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009325647