Time Preference and Interest Rate in a dynamic general Equilibrium Model

Gaowang Wang

MPRA Paper from University Library of Munich, Germany

Abstract: This paper reexamines the relationship between the time preference rate and the real interest rate in the neoclassical growth model by introducing Keynesian time preference. It is shown that the long-run behavior of the neoclassical growth model persists. When introduucing money by money-in-utility, money is superneutral and the optimal monetary policy is the Friedman rule.

Keywords: Keynesian time preference; Monetary Superneutrality; Optimum Quantity of Money (search for similar items in EconPapers)
JEL-codes: E31 E5 O42 (search for similar items in EconPapers)
Date: 2011-01-01
New Economics Papers: this item is included in nep-cis, nep-dge, nep-mon and nep-upt
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https://mpra.ub.uni-muenchen.de/34063/1/MPRA_paper_34063.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/39396/2/MPRA_paper_39396.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:34063

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