This paper studies an economy with trading frictions, and liquid outside bonds in a model à la Lagos and Wright [17]. A no-arbitrage condition between nominal assets characterizes coexistence between money and nominal bonds and results in the Fisher equation endoge- nously determining the equilibrium nominal interest rate.
Money, bonds and the nominal interest rate
Pietro Senesi
2018-01-01
Abstract
This paper studies an economy with trading frictions, and liquid outside bonds in a model à la Lagos and Wright [17]. A no-arbitrage condition between nominal assets characterizes coexistence between money and nominal bonds and results in the Fisher equation endoge- nously determining the equilibrium nominal interest rate.File in questo prodotto:
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