Interest Rate Pegs, Wealth Effects and Price Level Determinacy

15 Pages Posted: 13 Nov 2006

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

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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.

Suggested Citation

Annicchiarico, Barbara and Marini, Giancarlo, Interest Rate Pegs, Wealth Effects and Price Level Determinacy. Metroeconomica, Vol. 57, No. 4, pp. 521-535, November 2006. Available at SSRN: https://ssrn.com/abstract=944271 or http://dx.doi.org/10.1111/j.1467-999X.2006.00254.x

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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