Hostname: page-component-cd9895bd7-jkksz Total loading time: 0 Render date: 2024-12-29T12:30:02.287Z Has data issue: false hasContentIssue false
  • English
  • Français

MONEY AND NOMINAL BONDS

Published online by Cambridge University Press:  01 April 2009

Alessandro Marchesiani  and
Pietro Senesi
Alessandro Marchesiani
Affiliation:
University of Naples L'Orientale
Pietro Senesi*
Affiliation:
University of Naples L'Orientale
*
Address correspondence to: Pietro Senesi, Department of Social Science, University of Naples L'Orientale, Largo S. Giovanni Maggiore, 30, 80134 Naples, Italy; e-mail: [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper studies an economy with ex post heterogeneity and nominal bonds in a model à la Lagos and Wright (2005). It is shown that a strictly positive interest rate is a sufficient condition for the allocation with nominal bonds to be welfare-improving. This result comes from protection against the inflation tax.

Keywords

MoneyNominal BondsTaxation
Type
Articles
Information
Macroeconomic Dynamics , Volume 13 , Issue 2 , April 2009 , pp. 189 - 199
Copyright
Copyright © Cambridge University Press 2009

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Andolfatto, David (2006) Revisiting the Legal Restrictions Hypothesis. Mimeo, Simon Fraser University.Google Scholar
Berentsen, Aleksander, Camera, Gabriele, and Waller, Christopher (2007) Money, credit and banking. Journal of Economic Theory 135, 171–195.Google Scholar
Berentsen, Aleksander, Camera, Gabriele, and Waller, Christopher (2005) The distribution of money balances and the non-neutrality of money. International Economic Review 46, 465–487.CrossRefGoogle Scholar
Berentsen, Aleksander, Rocheteau, Guillaume, and Shi, Shouyong (2007) Friedman meets Hosios: Efficiency in search models of money. Economic Journal 117, 174–195.CrossRefGoogle Scholar
Berentsen, Aleksander and Waller, Christopher (2005) Optimal Stabilization Policy with Flexible Prices. Mimeo, University of Notre Dame.Google Scholar
Berentsen, Aleksander and Waller, Christopher (2007) Outside Versus Inside Bonds. Mimeo, University of Notre Dame.CrossRefGoogle Scholar
Bewley, Truman (1980) The optimum quantity of money. In Karaken, John H. and Wallace, Neil (eds.), Models of Monetary Economics, pp. 162–210. Minneapolis, MN: FRB Minneapolis.Google Scholar
Boel, Paola and Camera, Gabriele (2006) Efficient monetary allocations and the illiquidity of bonds. Journal of Monetary Economics 53, 1693–1715.Google Scholar
Cavalcanti, Ricardo and Wallace, Neil (1999) Inside and outside money as alternative media of exchange. Review of Economic Dynamics 2, 104–136.Google Scholar
Cavalcanti, Ricardo, Erosa, Andres, and Temzelides, Ted (1999) Private money and reserve management in a random matching model. Journal of Political Economy 107, 929–945.CrossRefGoogle Scholar
Green, Edward and Zhou, Ruilin (2005) Money as a mechanism in a Bewley economy. International Economic Review 46, 351–371.Google Scholar
He, Ping, Huang, Lixin, and Wright, Randall (2005) Money and banking in a search equilibrium. International Economic Review 46, 637–670.Google Scholar
Kocherlakota, Narayana (1998) Money is memory. Journal of Economic Theory 81, 232–251.Google Scholar
Kocherlakota, Narayana (2003) Societal benefits of illiquid bonds. Journal of Economic Theory 108, 179–193.Google Scholar
Lagos, Ricardo and Wright, Randall (2004) A Unified Framework for Monetary Theory and Policy Analysis. FRB Minneapolis Staff Report No. 346.Google Scholar
Lagos, Ricardo and Wright, Randall (2005) A unified framework for monetary theory and policy analysis. Journal of Political Economy 113, 463–484.Google Scholar
Levine, David K. (1991) Asset trading mechanisms and expansionary policy. Journal of Economic Theory 54, 148–164.CrossRefGoogle Scholar
Li, Victor E. (1995) The optimal taxation of fiat money in search equilibrium. International Economic Review 36, 927–942.CrossRefGoogle Scholar
Li, Victor E. (1997) The efficiency of monetary exchange in search equilibrium. Journal of Money, Credit and Banking 29, 61–72.CrossRefGoogle Scholar
Rocheteau, Guillaume and Wright, Randall (2005) Money in search equilibrium, in competitive equilibrium and in competitive search equilibrium. Econometrica 73, 175–202.Google Scholar
Shi, Shouyong (1996) Credit and money in a search model with divisible commodities. Review of Economic Studies 63, 627–652.CrossRefGoogle Scholar
Shi, Shouyong (1997) A divisible search model of fiat money. Econometrica 65, 75–102.CrossRefGoogle Scholar
Wallace, Neil (2001) Whither monetary economics? International Economic Review 42, 847–869.CrossRefGoogle Scholar
Zhu, Tao and Wallace, Neil (2007) Pairwise trade and coexistence of money and higher-return assets. Journal of Economic Theory 133, 524–535.CrossRefGoogle Scholar