This paper analyses the issue of price level determinacy in an optimizing general equilibrium model with overlapping generations. It is shown that under a pure interest rate peg wealth effects rule out nominal indeterminacy but give rise to multiple equilibria.
Annicchiarico, B., Marini, G. (2006). Interest rate pegs, wealth effects and price level determinacy. METROECONOMICA, 57(4), 521-535 [10.1111/j.1467-999X.2006.00254.x].
Interest rate pegs, wealth effects and price level determinacy
ANNICCHIARICO, BARBARA;MARINI, GIANCARLO
2006-01-01
Abstract
This paper analyses the issue of price level determinacy in an optimizing general equilibrium model with overlapping generations. It is shown that under a pure interest rate peg wealth effects rule out nominal indeterminacy but give rise to multiple equilibria.File in questo prodotto:
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