Document Type
Discussion Paper
Publication Date
9-1-1981
CFDP Number
605
CFDP Pages
22
Abstract
When government liabilities (including money) are held in private portfolios only as stores of value, and do not provide additional benefits (as liquidity services), the real variables in an economy with uncertainty are not affected by the government’s trading in assets. There are also policies which alter the money supply through taxes or subsidies, and affect the price of money without changing real variables.
Recommended Citation
Chamley, Christophe and Polemarchakis, Heracles M., "Asset Markets, General Equilibrium and the Neutrality of Money" (1981). Cowles Foundation Discussion Papers. 841.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/841