TITLE:
Ambiguity, Money Transfers, and Endogenous Fluctuations
AUTHORS:
Eisei Ohtaki
KEYWORDS:
Lump-Sum Money Transfer, Indeterminacy, Endogenous Business Cycle, Ambiguity, Overlapping Generations Model
JOURNAL NAME:
Theoretical Economics Letters,
Vol.11 No.2,
April
2,
2021
ABSTRACT: This article reexamines the
implications of stochastic lump-sum money transfers in a
monetary overlapping generations model, wherein agents
are endowed with maxmin expected utility preferences. It is shown that: 1)
there exists a continuum of stationary monetary equilibria, wherein a unique
optimal one might exist, and 2) there exist innumerable nonstationary monetary
equilibria, wherein the real money balance can move freely within a certain
range.