Determinacy of Interest Rate Rules with Bond Transaction Services in a Cashless Economy

Massimiliano Marzo and Paolo Zagaglia

No 2008:7, Research Papers in Economics from Stockholm University, Department of Economics

Abstract: Canzoneri and Diba (2004) show that the Taylor principle is not a panacea for equilibrium determinacy in a model where bonds and money provide liquidity services to households. We consider a cashless variant of their model with two types of government bonds. One bond provides transaction services, whereas the other is used only as a store of value. We show that the Taylor principle is still sacrosant. In general, the results of Leeper (1991) are confirmed.

Keywords: Monetary Policy; Fiscal Policy; Government Bonds; Determinacy (search for similar items in EconPapers)
JEL-codes: C68 E52 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2008-08-11
New Economics Papers: this item is included in nep-cba, nep-dge, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www2.ne.su.se/paper/wp08_07.pdf (application/pdf)

Related works:
Working Paper: Determinacy of interest rate rules with bond transaction services in a cashless economy (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:sunrpe:2008_0007

Access Statistics for this paper

More papers in Research Papers in Economics from Stockholm University, Department of Economics Department of Economics, Stockholm, S-106 91 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Anne Jensen ( this e-mail address is bad, please contact ).