| Author: | Thadden, L. von |
| Title: | Money, inflation, and capital formation in a model of overlapping generations with multiple means of payment |
| Journal: | Oxford Economic Papers
2002 : JUL, VOL. 54:3, p. 534-560 |
| Index terms: | Inflation Financial markets Capital |
| Language: | eng |
| Abstract: | The paper develops a small intertemporal equilibrium model in which either hypothesis can be addressed, depending on whether a barrier to extending credit becomes binding or not. When the barrier is not binding, money and capital act as close substitutes, making the Tobin effect likely to prevail under determinate adjustment dynamics towards the long-run equilibrium. When the barrier is binding, the anti-Tobin effect, as suggested by the complementarity hypothesis, becomes more likely, and adjustment dynamics may turn locally indeterminate. |
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