This paper reexamines the condition <InlineEquation ID="Equ1"> <EquationSource Format="TEX">$E\{\ln r\} \ln $</EquationSource> </InlineEquation> (1 + n), which Zilcha (1991) presents as a necessary and sufficient condition for dynamic inefficiency of stationary allocations in overlapping generation models with stochastic production. We show that this condition is necessary but not...</equationsource></inlineequation>

This paper uses a general equilibrium model to study the determination of the exchange rate in an economy with fundamental uncertainty. The model has steady state equilibria in which the exchange rate is constant. These equilibria may coexist with “quasi-fundamental” equilibria –...