Money, Tobin Effect, and Increasing Returns

Basci, Erdem; Erdogan, Ayse M. and Saglam, Ismail (2006): Money, Tobin Effect, and Increasing Returns. Unpublished.

Abstract

This paper shows that unregulated decentralized equilibrium is viable under increasing returns technologies in an overlapping generations model of production with cash-in-advance constraints. We also demonstrate that the model exhibits both the Tobin effect and the reverse Tobin effect.

• Item Type: MPRA Paper
• Institution: Bogazici University
• Language: English
• Keywords: Increasing returns; cash-in-advance constraints; overlapping generations; Phillips curve
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy (Targets, Instruments, and Effects); D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D51 - Exchange and Production Economies; D - Microeconomics > D9 - Intertemporal Choice and Growth > D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving; D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D52 - Incomplete Markets