Interest Rate Pegs, Wealth Effects and Price Level Determinacy

21 Pages Posted: 4 Feb 2005

See all articles by Barbara Annicchiarico

Barbara Annicchiarico

University of Rome, Tor Vergata - Department of Economics and Finance; University of Rome Tor Vergata - Centre for International Studies on Economic Growth (CEIS)

Giancarlo Marini

University of Rome Tor Vergata - Faculty of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: December 2004

Abstract

This paper analyses the issue of price level determinacy in an optimising 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.

Keywords: Price Level Determination, Interest Rate Pegging, Multiple Equilibria

JEL Classification: E31, E63

Suggested Citation

Annicchiarico, Barbara and Marini, Giancarlo, Interest Rate Pegs, Wealth Effects and Price Level Determinacy (December 2004). CEIS Working Paper No. 65. Available at SSRN: https://ssrn.com/abstract=661144 or http://dx.doi.org/10.2139/ssrn.661144

Barbara Annicchiarico (Contact Author)

University of Rome, Tor Vergata - Department of Economics and Finance ( email )

Rome, I-00133
Italy

University of Rome Tor Vergata - Centre for International Studies on Economic Growth (CEIS) ( email )

Via Columbia, 2
Rome, I-00133
Italy

Giancarlo Marini

University of Rome Tor Vergata - Faculty of Economics ( email )

Via Columbia n.2
Rome, 00100
Italy

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