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- Title
The robustness of optimal equilibrium among overlapping generations.
- Authors
Burke, Jonathan L.
- Abstract
We combine and strengthen optimality and robustness theorems for the overlapping-generations model of money. Roughly, we find a Pareto-optimal monetary equilibrium of a generic stationary economy that is near an optimal monetary equilibrium of each nearby non-stationary economy. Since the nearby equilibria are monetary, the general problem of macroeconomic stabilization reduces to maintaining the money supply. And since the nearby equilibria are optimal, stabilization is socially desirable.
- Subjects
ECONOMIC equilibrium; ECONOMICS; ECONOMIC indicators; MACROECONOMICS; MONEY supply
- Publication
Economic Theory, 1999, Vol 14, Issue 2, p311
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/s001990050296