Walras' Law in stochastic macro models. The example of the optimal monetary instrument

Hansjörg Klausinger

No 82, Department of Economics Working Paper Series from WU Vienna University of Economics and Business

Abstract: This note demonstrates that the shocks explicitly modeled as well as those implicitly present in stochastic macro-models must obey a restriction derived from Walras' law. In the standard case of statistical independence of real and monetary shocks there must be a financial shock to bond demand that mirrors those shocks, bond holdings thus acting in fact as buffer stocks. As an example the choice of the optimal monetary instrument is examined for the converse case of buffer-stock money and compared with the standard case.

Keywords: Walras' Law; optimal monetary instrument; buffer-stock money (search for similar items in EconPapers)
Date: 2002
References: Add references at CitEc
Citations: View citations in EconPapers (29)

Downloads: (external link)
https://epub.wu.ac.at/914/ original version (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden (https://epub.wu.ac.at/914/ [308 PERMANENT REDIRECT]--> https://epub.wu.ac.at/id/eprint/914 [302 FOUND]--> https://research.wu.ac.at/en/publications/11a94ce2-2a79-4b2e-b5b2-61d2874043d4)

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:wiw:wus005:914

Access Statistics for this paper

More papers in Department of Economics Working Paper Series from WU Vienna University of Economics and Business Welthandelsplatz 1, 1020 Vienna, Austria.
Bibliographic data for series maintained by WU Library ().