Myopia and monetary equilibria
Lovo, Stefano M. and Polemarchakis, H. M. (Heraklis M.). (2010) Myopia and monetary equilibria. Journal of Mathematical Economics, Vol.46 (No.5). pp. 925-936. ISSN 0304-4068Full text not available from this repository.
Official URL: http://dx.doi.org/10.1016/j.jmateco.2010.08.007
In an infinitely lived, representative individual economy, important properties of competitive equilibria, such as determinacy and the non-existence of monetary equilibria, are not robust to the introduction of myopia. An individual is myopic if, at each date, he plans consumption only for that date and few periods that immediately follow; that is, his planning horizon, n, is finite. Equilibria with myopia can display real indeterminacy and allow for monetary as well as non-monetary steady states; thus, they share some of the features of equilibria in economies of overlapping generation. The equilibrium price dynamics (but not the consumption dynamics) of an exchange economy with extreme myopia, n =1, are identical to the dynamics of an overlapping generation economy with two-period lives. (C) 2010 Elsevier B.V. All rights reserved.
|Item Type:||Journal Article|
|Subjects:||H Social Sciences > HC Economic History and Conditions
Q Science > QA Mathematics
H Social Sciences
|Divisions:||Faculty of Social Sciences > Economics|
|Journal or Publication Title:||Journal of Mathematical Economics|
|Official Date:||20 September 2010|
|Number of Pages:||12|
|Page Range:||pp. 925-936|
|Access rights to Published version:||Restricted or Subscription Access|
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