| St. Louis Fed | Economic Research | EconDISC® | FRED® | GeoFRED® | ALFRED® | CASSIDI® | FRASER® | Liber8® | APIs | Fed System | Help |
|
| Publications | Economic Data - FRED® | Working Papers | Economists | Conferences | CRE8® |
| Employment | Seminars | Monetary Aggregates | Tracking the Recession |
|
Working Paper 2009-044A Search | View by Year | View by Category | View by Author | View by JEL Code"Essential Interest-Bearing Money"
I examine optimal monetary policy in a Lagos and Wright [A unified framework for monetary theory and policy analysis, J. Polit. Econ. 113 (2005) 463—484] model where trade is centralized and all exchange is voluntary. I identify a class of incentive feasible policies that improve welfare beyond what is achievable with zero intervention. Any policy in this class necessarily entails a non-negative inflation rate and a strictly positive nominal interest rate. Despite the absence of a lump-sum tax instrument, there exists an incentive-feasible policy that implements the first-best allocation. Full Text - Acrobat PDF (208k) Notify Me of Updates for:
|
| About | Contact Us | Privacy | Legal | Top of Page | |
© 2009 Federal Reserve Bank of St. Louis