Monetary Equilibria and Knightian Uncertainty

Eisei Ohtaki and Hiroyuki Ozaki
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Hiroyuki Ozaki: Faculty of Economics, Keio University

No 2012-032, Keio/Kyoto Joint Global COE Discussion Paper Series from Keio/Kyoto Joint Global COE Program

Abstract: This article considers a pure-endowment stationary stochastic overlapping generations economy, in which agents have maximin expected utility preferences. Two main results are obtained. First, we show that multiple stationary monetary equilibria exist, and hence real as well as price indeterminacy arises under the assumption that aggregate shock exists. Second, we show that each of these stationary monetary equilibria is conditionally Pareto optimal; i.e., no other stationary allocations strictly Pareto dominate the equilibrium allocations.

Pages: 24 pages
Date: 2013-02
New Economics Papers: this item is included in nep-dge, nep-mon and nep-upt
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Monetary equilibria and Knightian uncertainty (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:kei:dpaper:2012-032

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