Monetary Policy and Bubbles in a New Keynesian Model with Overlapping Generations

Jordi Galí

No 26796, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: 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.

JEL-codes: E44 E52 (search for similar items in EconPapers)
Date: 2020-02
New Economics Papers: this item is included in nep-cba, nep-dge, nep-mac, nep-mon and nep-ore
Note: ME EFG
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published as Jordi Galí, 2021. "Monetary Policy and Bubbles in a New Keynesian Model with Overlapping Generations," American Economic Journal: Macroeconomics, vol 13(2), pages 121-167.

Downloads: (external link)
http://www.nber.org/papers/w26796.pdf (application/pdf)

Related works:
Journal Article: Monetary Policy and Bubbles in a New Keynesian Model with Overlapping Generations (2021)
Working Paper: Monetary Policy and Bubbles in 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) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:26796

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w26796

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().