Money Growth, Dynamic Efficiency and Asset Bubbles in a Perpetual Youth Model

Research output: Contribution to journalArticlepeer-review

Abstract

We consider a perpetual youth model in which real balances are an argument of the utility function. We show that dynamic efficiency is compatible with a positive inflation rate, and that the higher inflation, the larger is the size of the bubble required to remove the inefficiency.
Original languageEnglish
Pages (from-to)68-71
Number of pages4
JournalEconomics Letters
Volume2016/138
Publication statusPublished - 2016

Keywords

  • Asset bubbles, dynamic inefficiency, money growth

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