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Ngoc-Sang PHAM, 2014. "Collateral monetary equilibrium with liquidity constraints
in an in_nite horizon economy"
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| Abstract: |
| This paper considers an in nite-horizon monetary economy with collateralized assets
in which only commodities can be used as collateral. A Central Bank lends money
to households by creating short- and long-term loans. Households can deposit or borrow
money on both short- and long-term maturity; they face a cash-in-advance constraint
when buying commodities of nancial assets.
Under various Gains to Trade Hypotheses, the existence of collateral monetary equilibrium
is ensured. I also provide some properties of equilibira, including the liquidity
trap. |
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