Monetary policy is superneutral in an overlapping generations model. Previous authors have argued that superneutrality does not hold in such a setting. However, the standard results rely on the counter-factual premise of helicopter money and are...
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ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
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Monetary policy is superneutral in an overlapping generations model. Previous authors have argued that superneutrality does not hold in such a setting. However, the standard results rely on the counter-factual premise of helicopter money and are overturned if money creation through open market operations is taken into account. This result suggests that a more realistic representation of monetary policy may generally be helpful.
