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| Tekijä: | Berentsen, A. Rocheteau, G. Shi, S. |
| Otsikko: | Friedman meets Hosios: Efficiency in search models of money |
| Lehti: | Economic Journal
2007 : JAN, VOL. 117:516, p. 174-195 |
| Asiasana: | monetary policy equilibrium analysis efficiency models |
| Kieli: | eng |
| Tiivistelmä: | This study deals with optimal monetary (hereafter as: mon.) policy (here as: pol.) in an economy with endogenous search decisions. It is shown that the same frictions giving fiat money a positive value generate an inefficient (here as: ineff.) quantity of goods in each trade and an ineff. number of trades. The Friedman rule (as: Fr-rl.) eliminates the first inefficiency and the Hosios rule the second. A mon. equilibrium attains the social optimum if and only if both rules are satisfied. If both rules cannot be satisfied simultaneously, optimal mon. pol. achieves only the second best (here as: s-b). The conditions under which the s-b. mon. pol. exceeds the Fr-rl. are analyzed. |
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