Sunspot equilibria in a monetary real business cycle model
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Authors
In this paper a modification of the cash-in-advance real business cycle model is introduced in which the possibility of any credit contract is excluded. We show that for some parameter settings the model displays familiar saddle-point stability whereas for other constellations the steady state is a sink. In those cases, sunspot solutions are obtained.
Original language | English |
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Journal | Economics Letters |
Volume | 53 |
Issue number | 3 |
Pages (from-to) | 305-310 |
Number of pages | 6 |
ISSN | 0165-1765 |
DOIs | |
Publication status | Published - 01.12.1996 |
Externally published | Yes |
- Real business cycles, Sunspots
- Economics