Comment on Long and Plosser meet Bewley and Lucas

• 成果类型: Editorial Material
• 署名作者: Khan, Aubhik
• 署名单位: University System of Ohio; Ohio State University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2019.02.001
• 发表日期: 2019
• 页码: 93-95
• 关键词: Money and business cycles; Multi-sector models; incomplete markets

摘要

Feng Dong and Yi Wen introduce money into the Long and Plosser multi-sector real business cycle model. Money exists as a liquid asset that allows households to respond to idiosyncratic preference shocks. Despite the resulting heterogeneity in consumption, a constant marginal utility of leisure implies that households eliminated differences in their wealth each period. I argue that this framework implies excessive consumption volatility at the household level. (C) 2019 Elsevier B.V. All rights reserved.