Borrowing constraints and complex dynamics in an OLG framework

TY - JOUR

T1 - Borrowing constraints and complex dynamics in an OLG framework

AU - Assenza, Tiziana

AU - Agliari, Anna

AU - Delli Gatti, Domenico

AU - Santoro, Emiliano

N1 - JEL classification: E32, E52

PY - 2009

Y1 - 2009

N2 - In this paper we model an OLG economy à la Kiyotaki and Moore whose novel feature is the role of money as a store of value and of bequest as a source of funds to be "invested" in landholding. The dynamics generated by the model are generally characterized by irregular cyclical trajectories and, under special configuration of the parameters, a strange attractor appears. In this setting, an expansionary monetary policy may have a stabilizing role due to the interaction between money holding and the accumulation of borrowers' net worth.

AB - In this paper we model an OLG economy à la Kiyotaki and Moore whose novel feature is the role of money as a store of value and of bequest as a source of funds to be "invested" in landholding. The dynamics generated by the model are generally characterized by irregular cyclical trajectories and, under special configuration of the parameters, a strange attractor appears. In this setting, an expansionary monetary policy may have a stabilizing role due to the interaction between money holding and the accumulation of borrowers' net worth.

KW - Faculty of Social Sciences

KW - credit cycles

KW - monetary policy

U2 - 10.1016/j.jebo.2009.07.011

DO - 10.1016/j.jebo.2009.07.011

M3 - Journal article

SN - 0167-2681

VL - 72

SP - 656

EP - 669

JO - Journal of Economic Behavior & Organization

JF - Journal of Economic Behavior & Organization

IS - 2

ER -