Intertemporal substitution and smoothness of consumption

Lawrence Christiano

No 427, Working Papers from Federal Reserve Bank of Minneapolis

Abstract: We prove the general existence of steady states with positive consumption in an N goods and fiat money version of the Kiyotaki-Wright (?On money as a median of exchange,? Journal of Political Economy 1989, 97 (4), 927?54) model by admitting mixed strategies. We also show that there always exists a steady state in which everyone accepts a least costly-to-store object. In particular, if fiat money is one such object, then there always exists a monetary steady state. We also establish some other properties of steady states and comment on the relationship between steady states and (incentive) feasible allocations.

Date: 1987
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.minneapolisfed.org/research/common/pub_detail.cfm?pb_autonum_id=575 (application/pdf)
http://www.minneapolisfed.org/research/WP/WP427.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmwp:427

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of Minneapolis Contact information at EDIRC.
Bibliographic data for series maintained by Kate Hansel ().