The OLG model of Allais and Samuelson retains the methodological assumptions of agent optimization and market clearing from the Arrow–Debreu model, yet its equilibrium set has different properties: Pareto inefficiency, multiplicity, positive valuation of money, and a golden rule equilibrium in which the rate of interest is equal to population growth (independent of impatience). These properties...

The OLG model of Allais and Samuelson retains the methodological assumptions of agent optimization and market clearing from the Arrow-Debreu model, yet its equilibrium set has different properties: Pareto inefficiency, indeterminacy, positive valuation of money, and a golden rule equilibrium in which the rate of interest is equal to population growth (independent of impatience). These propertie...

This paper has been prepared as a background paper for the conference on " Monetary Cum Exchange Rate: What works best for emerging market economies? " to be held under the auspices Abstract The successes of inflation targeting monetary policies in established market economies have generated an interest among policy makers in some emerging market economies to explore the feasibility of adopting...

This study investigates the role of financial structure on the volatility of four asset prices in Korea. First, historical development of size, activity and efficiency of financial structure is investigated and development of non-bank financial institutions analyzed for the last three decades. Second, using the concept of bank-based and market-based financial structure, it is shown that there e...

This paper examines the relation between money and housing variables in the euro area and in the US. Our empirical model is based on a standard money demand relation which is augmented by housing market variables. In doing so, co-integrated money demand relationships can be established for both the euro area and the US. Furthermore, we find evidence for asset inflation channels, that is, liquid...

there are various ways for estimating velocity of money in economic literature and each has its own specific weaknesses and strengths. particularly, since a great deal of financial innovations and changes have recently taken place affecting the velocity of money, many traditional methods can no langer calculate the equilibrium velocity of money, and they are no longer dependable from the econom...

This paper examines the effectiveness of fiscal policy in a general equilibrium macromodel with transactions money and an oligopolistic product market. The results suggest that although money may be neutral and play no direct role as policy instrument, its indirect impact on the effectiveness of fiscal policy can be quite substantial. In particular, (i) fiscal policy becomes ineffective as the ...

The behavior of institutional investors in money market securities, as exemplified by changes in assets allocated to money market mutual funds, is examined using a unique transaction data set and partial adjustment framework in order to validate fund managers and traders expectations. Individual transaction data is aggregated and separated into a low and high frequency component. The low freque...

This paper provides a simple example of an economy in which equilibrium prices and quantities exhibit what may be the central feature of the modern business cycle: a systematic relation between the rate of change in nominal prices and the level of real output. The relationship, essentially a variant of the well-known Phillips curve, is derived within a framework from which all forms of “money i...