Download This PaperOptimal Monetary Policy in a Pure Currency Economy with Heterogenous Agents
30 Pages Posted: 17 Dec 2016 Last revised: 3 Feb 2017
Date Written: December 16, 2016
Abstract
This paper shows that, in a pure currency economy with heterogeneous agents and multiple commodities, a pecuniary externality plays a key role in making the equilibrium allocation constrained inefficient. Monetary policy intervention can help improve matters.
Keywords: Money, Heterogeneity, Pecuniary Externality, Monetary Policy
JEL Classification: E40
Suggested Citation: Suggested Citation
Amendola, Nicola and Ferraris, Leo and Mattesini, Fabrizio, Optimal Monetary Policy in a Pure Currency Economy with Heterogenous Agents (December 16, 2016). CEIS Working Paper No. 394, Available at SSRN: https://ssrn.com/abstract=2886533 or http://dx.doi.org/10.2139/ssrn.2886533
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