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Money growth, dynamic efficiency and asset bubbles in a perpetual youth model

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  • Femminis, Gianluca

Abstract

We consider a perpetual youth model in which real balances are an argument of the utility function. We show that dynamic efficiency is compatible with a positive inflation rate, and that the higher inflation, the larger is the size of the bubble required to remove the inefficiency.

Suggested Citation

  • Femminis, Gianluca, 2016. "Money growth, dynamic efficiency and asset bubbles in a perpetual youth model," Economics Letters, Elsevier, vol. 138(C), pages 68-71.
    • Handle: RePEc:eee:ecolet:v:138:y:2016:i:c:p:68-71
    DOI: 10.1016/j.econlet.2015.11.029
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    References listed on IDEAS

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    More about this item

    Keywords

    Asset bubbles; Dynamic inefficiency; Money growth;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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