Overlapping Structures As A Model Of Money

The list of those to whom I am indebted is a long one. Prof. Neil Wallace (University of Minnesota) stimulated my interest in the kind of models with which the book deals. I am grateful for a large number of conversations with him. I learned a lot from him and will always be proud that I have been one of his student. I hope that he is not dissappointed with the outcome. I am deeply indebted to Prof. Dr. Hans-Werner Sinn (University of Munich). His observations and critical remarks were instrumental for a great number of changes and improvements which I was able to introduce while revising the manuscript again and again, and rethinking the basic arguments. I also want to thank Prof. Dr. Utta Gruber (University of Munich) for her helpful comments and for her support. I am very much obliged to Prof. Dr. Dr. h. c. Hans Moller (University of Munich). For many years I have had the honour of a nearly continuous dialogue with him. I am also grateful to Prof. Dr. Werner Gumpel (University). The stimulating atmosphere and the research opportunities which were provided by his seminar contributed a lot to my work. Finally I want to thank my wife Sigrid for looking through the English draft of this book and correcting numerous linguistic flaws. The remaining errors are of course mine. CONTENTS Page v Preface 1. INTRODUCTION 1. 1.

The book reviews monetary applications of overlapping gene- rations models and models with cash-in-advance constraints. It focuses on the implications for monetary economics. It tries to make sense of the available indeterminancy propositions. They are the most puzzling property of OGMs. The book surveys and synthesizes most of the available research papers. Assesses the usefulness of the approach for the advancement of monetary economics. The book can be used as a non-technical introductory text, which relies foremost on intuitive arguments.

The main arguments of this paper can be summarized as follows. (1) The overlapping-generations (OG) structure provides a useful framework for the analysis of macroeconomic issues involving intertemporal allocation. (2) As a "model of money," the basic OG setup -- which excludes cash-in-advance or money-in-the-utility-function (MIUF) features -- is inadequate and misleading because it neglects the medium-of-exchange property that is the distinguishing characteristic of money. (3) That this neglect obtains is verified by noting that, in contrast with an axiomatic "traditional presumption," the same aggregate leisure/consumption bundles are available in equilibria in which "money" is valued and valueless. (4) That the model may be misleading is demonstrated by examples in which three of its most striking properties --tenuousness of monetary equilibrium, optimality of zero money growth, and price level invariance to open-market exchanges -- disappear in the presence of modifications designed to reflect the medium-of-exchange property. (5) There is no compelling reason why cash-in-advance, MIUF, or other appendages should not be used in conjunction with the OG framework

Revised edition of the authors' Modeling monetary economies, 2016.

It took me over five years to write this book. Finishing my research project and thus finishing this book would not have been possible without the help of many friends of mine. Thus, the first thing to do is to say 'Thanks a lot' . This means at first place the Evangelisches Studienwerk Haus Villigst. They gave me a grant for my work, thus laying the important financial grounds of everything I've done. There is such a large number of friends I worked and lived with over the last few years that I cannot possibly mention them all by name, but I'll try, anyway: So, thanks Christiane, Gilbert, Maik, Karl, and everybody else feeling that his or her name should appear in this list. And, of course, thanks Franz Haslinger, for letting me do whatever I wanted to - and for even encouraging me to stick with it. One more thing I'd like to mention: Although this work is based on very heavy use of computer power, it is my special pride to say that not a single penny (i.e. Deutschmark) had to be spent for software in order to do this work. Instead, all that has been done has been done by free software. Thus, I would like to mention some of my most heavily used software tools in order to let you, the reader, know that nowadays you don't depend on big commercial software packages any more.

The essays in this volume investigate the challenges of transitioning to lower levels of inflation and conducting monetary policy in low-inflation economies. The essays make both theoretical and empirical contributions.

This book answers some challenging questions in monetary growth theory within a compact theoretical framework. The author succeeds in integrating the theory of money, the theory of value and the theory of growth. The book re-examines many important ideas in modern monetary economics within a single analytical framework. It is concerned not only wit