Open AccessNominal Idiosyncratic Shocks and Optimal Monetary Policy
Author(s) -
Eisei Ohtaki
Publication year - 2013
Publication title -
ssrn electronic journal
Language(s) - English
Resource type - Journals
ISSN - 1556-5068
DOI - 10.2139/ssrn.2315365
Subject(s) - monetary policy , economics , monetary economics , keynesian economics , econometrics , macroeconomics
This article considers an overlapping generations model with nominal idiosyncratic shocks. Such shocks are described as if they are exogenous nominal taxes/subsidies and cause nondegenerate ex-post distributions of money. We then show that the optimal money growth rate exists and is greater than one.
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