Cash-in-advance constraints in the diamond overlapping generations model: neutrality and optimality of monetary policies

Bertrand Crettez (), Philippe Michel and Bertrand Wigniolle
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Bertrand Crettez: C.R.E.S.E., Université de Franche-Comté and C.E.M.E., U.R.A. C.N.R.S. DO924, Université de Paris-I

No 1998005, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: This paper is a study of money in overlapping generations models with cash-in-advance constraints. We first offer a brief review of different features of the cash-in-advance constraint. Then we propose a general formulation and study the neutrality of money. We show that both neutrality and equilibrium dynamics depend on the form of the cashin-advance constraint. We then show that optimal intergenerational resources sharing can be implemented through monetary transfers. Finally, we find that the Chicago Rule is implied by optimal monetary policy.

Keywords: cash-in-advance constraint; monetary policy; superneutrality; overlapping generations model. (search for similar items in EconPapers)
JEL-codes: D91 E31 E61 (search for similar items in EconPapers)
Date: 1998-01-01
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Related works:
Journal Article: Cash-in-Advance Constraints in the Diamond Overlapping Generations Model: Neutrality and Optimality of Monetary Policies (1999)
Working Paper: Cash-in-Advance Constraints in the Diamond Overlapping Generations Model: Neutrality and Optimality of Monetary Policies (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:1998005

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