Liquidity effects in non Ricardian economies

Jean-Pascal Benassy ()

PSE Working Papers from PSE (Ecole normale supérieure)

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 to generate such a liquidity effect.

New Economics Papers: this item is included in nep-dge, nep-mac and nep-mon
Date: 2005
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Related works:
Journal Article: Liquidity Effects in Non-Ricardian Economies (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:pse:psecon:2005-47

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