Optimality of the Friedman Rule in an Overlapping Generations Model with Spatial Separation Export

@article{citeulike:2086046, abstract = {Recent models with spatial separation and limited communication suggest that the Friedman rule may not be optimal. This is important in light of the disparity between theory and practice concerning optimal monetary policy. We take a close look at these models and show that intergenerational transfers are key to the suboptimality of the Friedman rule. The Friedman rule is a necessary condition for achieving the efficient allocation in equilibrium. We also show that the Friedman rule is chosen whenever agents can implement mutually beneficial arrangements.}, author = {Haslag, Joseph H. and Martin, Antoine}, citeulike-article-id = {2086046}, citeulike-linkout-0 = {http://www.blackwell-synergy.com/doi/abs/10.1111/j.1538-4616.2007.00085.x}, citeulike-linkout-1 = {http://dx.doi.org/10.1111/j.1538-4616.2007.00085.x}, doi = {10.1111/j.1538-4616.2007.00085.x}, journal = {Journal of Money, Credit and Banking}, keywords = {friedman\_rule, macroeconomics, monetary\_policy, olg}, number = {7}, pages = {1741--1758}, posted-at = {2007-12-10 15:40:01}, priority = {2}, title = {Optimality of the Friedman Rule in an Overlapping Generations Model with Spatial Separation}, url = {http://dx.doi.org/10.1111/j.1538-4616.2007.00085.x}, volume = {39}, year = {2007} }

TY - JOUR ID - citeulike:2086046 L3 - citeulike-article-id:2086046 N2 - Recent models with spatial separation and limited communication suggest that the Friedman rule may not be optimal. This is important in light of the disparity between theory and practice concerning optimal monetary policy. We take a close look at these models and show that intergenerational transfers are key to the suboptimality of the Friedman rule. The Friedman rule is a necessary condition for achieving the efficient allocation in equilibrium. We also show that the Friedman rule is chosen whenever agents can implement mutually beneficial arrangements. IS - 7 JF - Journal of Money, Credit and Banking EP - 1758 TI - Optimality of the Friedman Rule in an Overlapping Generations Model with Spatial Separation VL - 39 SP - 1741 KW - friedman_rule KW - macroeconomics KW - monetary_policy KW - olg AU - Haslag, Joseph AU - Martin, Antoine PY - 2007/// UR - http://dx.doi.org/10.1111/j.1538-4616.2007.00085.x ER -