TY - JOUR
T1 - Monetary equilibria and Knightian uncertainty
AU - Ohtaki, Eisei
AU - Ozaki, Hiroyuki
N1 - Funding Information:
The second author’s work was supported by JSPS KAKENHI Grant Number 23530226. This work was also supported by the grant-in-aid for the Global COE Program “Raising Market Quality-Integrated Design of Market Infrastructure” from MEXT. Both authors thank the two anonymous referees and participants at numerous seminars for their helpful comments.
Publisher Copyright:
© 2015, Springer-Verlag Berlin Heidelberg.
PY - 2015/8/12
Y1 - 2015/8/12
N2 - This article considers a pure-endowment stationary stochastic overlapping generations economy, in which agents have maxmin expected utility preferences. Two main results are obtained. First, we show that multiple stationary monetary equilibria exist. Consequently, real and price indeterminacies arise under the assumption that aggregate shock exists. Second, we show that each of these stationary monetary equilibria is conditionally Pareto optimal, i.e., no other stationary allocations strictly Pareto dominate the equilibrium allocations.
AB - This article considers a pure-endowment stationary stochastic overlapping generations economy, in which agents have maxmin expected utility preferences. Two main results are obtained. First, we show that multiple stationary monetary equilibria exist. Consequently, real and price indeterminacies arise under the assumption that aggregate shock exists. Second, we show that each of these stationary monetary equilibria is conditionally Pareto optimal, i.e., no other stationary allocations strictly Pareto dominate the equilibrium allocations.
KW - Conditional Pareto optimality
KW - Indeterminacy
KW - Maxmin expected utility
KW - Money
KW - Stochastic overlapping generations model
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U2 - 10.1007/s00199-015-0887-6
DO - 10.1007/s00199-015-0887-6
M3 - Article
AN - SCOPUS:84930767614
SN - 0938-2259
VL - 59
SP - 435
EP - 459
JO - Economic Theory
JF - Economic Theory
IS - 3
ER -