|
| |
| Patrick Fève, Fabrice Collard and Stéphane Auray |
| |
| ''Habit Persistence and Beliefs Based Liquidity Effect'' |
| ( 2002, Vol. 5 No.2 ) |
| |
| |
| The paper introduces habit persistence in consumption decisions in an infinitely-lived agents monetary model with a cash-in-advance constraint. We show that strong enough habit persistence yields indeterminate equilibria. However, real indeterminacy is not per se sufficient to obtain a liquidity effect. The form of the beliefs matters. |
| |
| |
| Keywords: |
JEL: E4 - Money and Interest Rates: General
E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit: General |
| |
| Manuscript Received : Mar 21 2002 | | Manuscript Accepted : Mar 29 2002 |
|
