A Monetary Search Model with Non-unitary Discounting

Daiki Maeda

ISER Discussion Paper from Institute of Social and Economic Research, The University of Osaka

Abstract: Based on findings in the behavioral economics literature, we incorporate non-unitary discounting into a monetary search model to study optimal monetary policy. We apply non-unitary discounting, that is, discount rates that are different across goods. With this extension to the model, we find that there are cases where optimal monetary policy deviates from the Friedman rule.

Date: 2019-09
New Economics Papers: this item is included in nep-cba, nep-dge, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:dpr:wpaper:1062

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