Liquidity Effects in Non-Ricardian Economies

Jean-Pascal Benassy ()

Scandinavian Journal of Economics, 2006, vol. 108, issue 1, pages 65-80

Abstract: It has often been found difficult to generate a liquidity effect (i.e., a negative effect of monetary injections on the nominal interest rate) in the traditional "Ricardian" stochastic dynamic model with a single infinitely lived household. We show that moving to a non-Ricardian environment where new agents enter the economy in each period allows such a liquidity effect to be generated. Copyright The editors of the "Scandinavian Journal of Economics", 2006 .

Date: 2006

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Working Paper: Liquidity effects in non Ricardian economies (2005)
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