Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/80213
Authors: 
Nakajima, Tomoyuki
Polemarchakis, Herakles
Year of Publication: 
2002
Series/Report no.: 
Working Paper, Brown University, Department of Economics 2002-25
Abstract: 
We consider a cash-in-advance economy under uncertainty in which monetary policy sets either short-term nominal interest rates or money supplies. We show that both the initial price level and the distribution of the inflation rate up to its expectation are indeterminate, regardless of the degree of competition or the flexibility of prices in commodity markets. This indeterminacy is not related to the stability of a deterministic steady state.
Subjects: 
sticky prices
monopolistic competition
monetary policy
uncertainty
indeterminacy.
JEL: 
D50
E31
E40
E50
Document Type: 
Working Paper

Files in This Item:
File
Size
194.85 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.