Monetary Policy and Bubbles in New Keynesian Model with Overlapping Generations
Jordi Galí ()
No 14887, CEPR Discussion Papers from C.E.P.R. Discussion Papers
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: Asset Price Volatility; Economic Fluctuations; monetary policy rules; Stabilization policies (search for similar items in EconPapers)
JEL-codes: E44 E52 (search for similar items in EconPapers)
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at email@example.com
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)
Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:14887
Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... rs/dp.php?dpno=14887
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().