Monetary Policy and Bubbles in New Keynesian Model with Overlapping Generations

Galí, Jordi
Authors registered in the RePEc Author Service: Jordi Galí

No 14887, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: I analyze an extension of the New Keynesian model that features overlapping generations of finitely-lived agents and (stochastic) transitions to inactivity. In contrast with the standard model, the proposed framework allows for the existence of rational expectations equilibria with asset price bubbles. I study the conditions under which bubble-driven fluctuations may emerge and the type of monetary policy rules that may prevent them. I conclude by discussing some of the model's welfare implications.

Keywords: Monetary policy rules; Stabilization policies; Asset price volatility; Economic fluctuations (search for similar items in EconPapers)
JEL-codes: E44 E52 (search for similar items in EconPapers)
Date: 2020-06
New Economics Papers: this item is included in nep-dge, nep-mac, nep-mon and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP14887 (application/pdf)

Related works:
Journal Article: Monetary Policy and Bubbles in a New Keynesian Model with Overlapping Generations (2021)
Working Paper: Monetary Policy and Bubbles in a New Keynesian Model with Overlapping Generations (2020)
Working Paper: Monetary policy and bubbles in a new Keynesian model with overlapping generations (2020)
Working Paper: Monetary Policy and Bubbles in a New Keynesian Model with Overlapping Generations (2017)
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:cpr:ceprdp:14887

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP14887

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().