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Contribution Details

Type Working Paper
Scope Discipline-based scholarship
Title Stochastic Tastes and Money in a Neo-Keynesian Economy
Organization Unit
Authors
  • Klaus Reiner Schenk-Hoppé
Language
  • English
Institution University of Zurich
Series Name Working paper series / Institute for Empirical Research in Economics
Number No. 88
ISSN 1424-0459
Date 2001
Abstract Text This paper studies a monetary economy with heterogenous agents in which trade takes place in a centralized market. Each agent is a potential producer and consumer of a service (or perishable good) but has stochastic preferences that determines his taste for the good in each period in time. Money serves as a medium of exchange as well as a store of value. We prove existence of stationary fix-price equilibria with exogenously given quantity of money in which transactions can take place at non-Walrasian prices. Precautionary savings, under- and oversupply, dynamics on moneynholdings, and the effects of changes in the quantity of money are discussed.
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