The robustness of optimal equilibrium among overlapping generations

Jonathan Burke

Economic Theory, 1999, vol. 14, issue 2, 329 pages

Abstract: We combine and strengthen optimality and robustness theorems for the overlapping-generations model of money. Roughly, we find a Pareto-optimal monetary equilibrium of a generic stationary economy that is near an optimal monetary equilibrium of each nearby non-stationary economy. Since the nearby equilibria are monetary, the general problem of macroeconomic stabilization reduces to maintaining the money supply. And since the nearby equilibria are optimal, stabilization is socially desirable.

JEL-codes: C60 C62 (search for similar items in EconPapers)
Date: 1999-08-24
Note: Received: October 27, 1997; revised version: March 25, 1998
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Citations: View citations in EconPapers (2)

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