Document Type
Discussion Paper
Publication Date
7-1-2006
CFDP Number
1574
CFDP Pages
26
Abstract
We prove the existence of monetary equilibrium in a finite horizon economy with production. We also show that if agents expect the monetary authority to significantly decrease the supply of bank money available for short term loans in the future, then the economy will fall into a liquidity trap today.
Recommended Citation
Dubey, Pradeep and Geanakoplos, John, "Money and Production, and Liquidity Trap" (2006). Cowles Foundation Discussion Papers. 1865.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/1865