| Tekijä: | Bhattacharya, J. Guzman, M. G. Shell, K. |
| Otsikko: | Price level volatility: A simple model of money taxes and sunspots |
| Lehti: | Journal of Economic Theory
1998 : AUG, VOL. 81:2, p. 401-430 |
| Asiasana: | STOCK MARKETS EQUILIBRIUM THEORY ECONOMIC THEORY PRICES TAXATION MODELS |
| Kieli: | eng |
| Tiivistelmä: | In the paper, sunspot equilibria in a static, one-commodity model with taxes and transfers denominated in money units are investigated. Volatility in this economy is purely monetary, since the only uncertainty is about the price level. Simple, robust examples of sunspot equilibria that were no randomizations over certainty equilibria are constructed. The source of these SSEs is identified: Equilibrium in the securities market is determined as if there were no restricted consumers and the unrestricted consumers face intrinsic uncertainty. Perfect securities markets eliminate allocation uncertainty, but they exacerbate price level volatility. |
SCIMA