Monetary Equilibria in a Cash-in-Advance Economy with Incomplete Financial Markets
Jinhui Bai () and
Additional contact information
Ingolf Schwarz: Max Planck Institute for Research on Collective Goods
No 05-005, JEPS Working Papers from JEPS
The general equilibrium model with incomplete financial markets (GEI) is extended by adding fiat money, fiscal and monetary policy and a cash-in-advance constraint. The central bank either pegs the interest rate or money supply while the fiscal authority sets a Ricardian or a non-Ricardian fiscal plan. We prove the existence of equilibria in all four scenarios. In Ricardian economies, the conditions required for existence are not more restrictive than in standard GEI. In non-Ricardian economies, the sufficient conditions for existence are more demanding. In the Ricardian economy, neither the price level nor the equivalent martingale measure are determinate.
Keywords: Money; incomplete markets; fiscal policy; indeterminacy (search for similar items in EconPapers)
JEL-codes: D52 E40 E50 (search for similar items in EconPapers)
Pages: 41 pages
New Economics Papers: this item is included in nep-cba, nep-dge, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to jeps.repec.org:80 (No such host is known. )
Journal Article: Monetary equilibria in a cash-in-advance economy with incomplete financial markets (2006)
Working Paper: Monetary Equilibria in a Cash-in-Advance Economy with Incomplete Financial Markets (2006)
Working Paper: Monetary Equilibria in a Cash-in-Advance Economy with Incomplete Financial Markets (2005)
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:jep:wpaper:05005
Access Statistics for this paper
More papers in JEPS Working Papers from JEPS
Bibliographic data for series maintained by Thomas Gall ().