Sub-optimality of the Friedman rule in Townsend's turnpike and stochastic relocation models of money: do finite lives and initial dates matter?

dc.contributor.author Bhattacharya, Joydeep
dc.contributor.author Haslag, Joseph
dc.contributor.author Bhattacharya, Joydeep
dc.contributor.author Martin, Antoine
dc.contributor.department Economics
dc.date 2018-02-17T18:19:59.000
dc.date.accessioned 2020-06-30T02:12:27Z
dc.date.available 2020-06-30T02:12:27Z
dc.date.issued 2005-03-23
dc.description.abstract <p>The Friedman rule, a widely studied prescription for monetary policy, is optimal in Townsend's turnpike model of money; it is not so in the overlapping generations version of his stochastic relocation model of money. We investigate these monetary models in the light of this disparity. To that end, we create a modified version of the turnpike model that generates the same stationary monetary equilibria as does the two-period overlapping generations model with random relocation. We exploit this equivalence to explain the aforementioned disparity. We also discuss the importance of whether or not the economy has an initial date.</p>
dc.format.mimetype application/pdf
dc.identifier archive/lib.dr.iastate.edu/econ_las_workingpapers/195/
dc.identifier.articleid 1194
dc.identifier.contextkey 8804267
dc.identifier.s3bucket isulib-bepress-aws-west
dc.identifier.submissionpath econ_las_workingpapers/195
dc.identifier.uri https://dr.lib.iastate.edu/handle/20.500.12876/22417
dc.source.bitstream archive/lib.dr.iastate.edu/econ_las_workingpapers/195/p1843_2005_03_01.pdf|||Fri Jan 14 21:57:13 UTC 2022
dc.subject.disciplines Economics
dc.subject.keywords Friedman rule
dc.subject.keywords monetary policy
dc.subject.keywords overlapping generations
dc.subject.keywords turnpike
dc.title Sub-optimality of the Friedman rule in Townsend's turnpike and stochastic relocation models of money: do finite lives and initial dates matter?
dc.type article
dc.type.genre working_paper
dspace.entity.type Publication
relation.isAuthorOfPublication 56f37f39-ec2a-4b0b-b491-e32fba8e2c73
relation.isOrgUnitOfPublication 4c5aa914-a84a-4951-ab5f-3f60f4b65b3d
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