This paper presents a pure currency economy with a nondegenerate distribution of money holdings in which, as conjectured by Wallace (Quarterly Journal of Economics 129, 259-274, 2014), there are transfer schemes financed by money creation that improve ex ante welfare relative to no-intervention. Differently from what was advocated by Wallace, pecuniary-like externalities, rather than the need to share liquidity risks, are responsible for the result.
Amendola, N., Ferraris, L., Mattesini, F. (2021). Liquidity externalities and the wallace conjecture. MACROECONOMIC DYNAMICS, 25(6), 1578-1588 [10.1017/S1365100519000798].
Liquidity externalities and the wallace conjecture
Ferraris L.
;
2021
Abstract
This paper presents a pure currency economy with a nondegenerate distribution of money holdings in which, as conjectured by Wallace (Quarterly Journal of Economics 129, 259-274, 2014), there are transfer schemes financed by money creation that improve ex ante welfare relative to no-intervention. Differently from what was advocated by Wallace, pecuniary-like externalities, rather than the need to share liquidity risks, are responsible for the result.
File in questo prodotto:
Non ci sono file associati a questo prodotto.
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
