Intertemporal General Equilibrium and Monetary Theory

Jacques Dreze and Heracles M. Polemarchakis
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Heracles M. Polemarchakis: Université Catholique de Louvain

Chapter 2 in Monetary Theory as a Basis for Monetary Policy, 2001, pp 33-71 from Palgrave Macmillan

Abstract: Abstract Theory is often at odds with the thinking and practice of monetary authorities. A confrontation of this situation is timely. General equilibrium theory serves to check the consistency of models and to bring out some of their properties. Surprisingly, an enquiry into monetary theory from the perspective of general equilibrium leads to conclusions that resemble views expressed recently by specialists in monetary theory and policy, and suggests an approach to policy resembling that practised by monetary authorities. Also, it delineates theoretical issues more sharply than do less abstract formulations.

Keywords: Interest Rate; Monetary Policy; Price Level; General Equilibrium; Money Supply (search for similar items in EconPapers)
Date: 2001
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Working Paper: Intertemporal general equilibrium and monetary theory (1998)
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DOI: 10.1007/978-1-4039-3961-6_2

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