Money and Credit: An Equivalence Result and Its Implications

Narayana Kocherlakota

No 115, 2007 Meeting Papers from Society for Economic Dynamics

Abstract: In a wide range of economic settings, equilibrium outcomes in pure credit equilibria are known to be Pareto optimal (or Pareto optimal given informational or enforcement limitations). In a series of examples, I demonstrate how the above equivalence result can be used to provide a more complete understanding of optimal monetary policy in heterogeneous agent economies.

Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed007:115

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