Dynamic Behavior of a Simple Neoclassical Model with Inside Money.
CALIFORNIA UNIV BERKELEY OPERATIONS RESEARCH CENTER
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The paper analyzes the standard one good neoclassical dynamic model in which wages to consumer-workers is paid in IOUs issued by producers. The wealth of consumers consists of their accumulated IOUs and the model differs from the traditional one in that it is not assumed that consumers wealth is exactly equal to the value of the capital stock. The dynamic behavior of the model turns out to be quite different from the traditional one, the main result being that, in the absence of excessive savings by consumers, the golden-rule will always be the unique stable steady state. Author
- Economics and Cost Analysis
- Operations Research