Nominal Idiosyncratic Shocks and Optimal Monetary Policy

Eisei Ohtaki

No e057, Working Papers from Tokyo Center for Economic Research

Abstract: This article considers an overlapping generations model with nominal idiosyncratic shocks. Such shocks are described as if they are exogenous nominal taxes/subsidies and cause nondegenerate ex-post distributions of money. We then show that the optimal money growth rate exists and is greater than one.

Pages: 15 pages
Date: 2013-08
New Economics Papers: this item is included in nep-cba, nep-dge, nep-fdg, nep-mon and nep-pbe
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Persistent link: https://EconPapers.repec.org/RePEc:tcr:wpaper:e57

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