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Journal Articles Scandinavian Journal of Economics Year : 2006

Liquidity effects in non-Ricardian economies


It has often been found difficult to generate a liquidity effect (i.e., a negative effect of monetary injections on the nominal interest rate) in the traditional "Ricardian" stochastic dynamic model with a single infinitely lived household. We show that moving to a non-Ricardian environment where new agents enter the economy in each period allows such a liquidity effect to be generated.

Dates and versions

halshs-00754156 , version 1 (20-11-2012)



Jean-Pascal Bénassy. Liquidity effects in non-Ricardian economies. Scandinavian Journal of Economics, 2006, 108 (1), pp.65-80. ⟨10.1111/j.1467-9442.2006.00440.x⟩. ⟨halshs-00754156⟩
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