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Money and Credit: An Equivalence Result and Its Implications

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  • Narayana Kocherlakota

    (University of Minnesota)

Abstract

In a wide range of economic settings, equilibrium outcomes in pure credit equilibria are known to be Pareto optimal (or Pareto optimal given informational or enforcement limitations). In a series of examples, I demonstrate how the above equivalence result can be used to provide a more complete understanding of optimal monetary policy in heterogeneous agent economies.

Suggested Citation

  • Narayana Kocherlakota, 2007. "Money and Credit: An Equivalence Result and Its Implications," 2007 Meeting Papers 115, Society for Economic Dynamics.
    • Handle: RePEc:red:sed007:115
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    References listed on IDEAS

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