Home > Working Papers

Working Paper 2009-034A

"Random Matching and Money in the Neoclassical Growth Model: Some Analytical Results"
by Christopher J. Waller

I use the monetary version of the neoclassical growth model developed by Aruoba, Waller and Wright (2008) to study the properties of the model when there is exogenous growth. I first consider the planner’s problem, then the equilibrium outcome in a monetary economy. I do so by first using proportional bargaining to determine the terms of trade and then consider competitive price taking. I obtain closed form solutions for the balanced growth path of all variables in all cases. I then derive closed form solutions for the transition paths under the assumption of full depreciation and, in the monetary economy, a non-stationary interest rate policy.

Full Text - Acrobat PDF (190k)

Notify Me of Updates for:
Category > Monetary Policy/Macroeconomics
Author > Christopher J. Waller
Research Papers and Publications: JEL Code > E20
Research Papers and Publications: JEL Code > E40
Research Papers and Publications: JEL Code > O42