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Optimal Monetary Policy in an Overlapping Generations Model
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
2014 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

In this thesis we study a monetary economy with overlapping generations. The thesis aims at complementing the work of Freeman (1989) by adding the assumption that transaction costs can be reduced by increasing real or nominal money holdings. The objective is to determine the optimal monetary policy which maximizes agents' expected lifetime utility. We find that the optimal monetary policy is to hold the fiat currency stock constant over time.

Place, publisher, year, edition, pages
Keyword [en]
Overlapping Generations, Optimal Monetary Policy, Fiat Money, Transaction Costs
National Category
URN: urn:nbn:se:uu:diva-226603OAI: oai:DiVA.org:uu-226603DiVA: diva2:726555
Available from: 2014-06-18 Created: 2014-06-18 Last updated: 2014-06-18Bibliographically approved

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