Abstract
The purpose of this paper is to analyze the number of perfect foresight equilibria in a monetary model where the consumer's behavior and the firm's behavior are explicitly derived from an intertemporal optimization. We show that the relevant transversality conditions reduce to the satisfaction of the intertemporal budget constraint of the consumer, or alternatively of the government. The assumption of a separable utility function enables us to characterize completely the perfect foresight equilibria: their number is shown to depend both on the specification of the government's policy instruments and on the utility function.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
