Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
884519 | Journal of Economic Behavior & Organization | 2008 | 28 Pages |
Abstract
In the credit model the agents incur debts along the transition path towards equilibrium, while in the cash-in-advance model convergence takes place without the occurrence of any debts or claims. The credit mechanism is shown to act as a 'soft' correction mechanism on credit fluctuations, while the cash-in-advance constraint acts as a 'hard' negative feedback effect driving the prices back towards a neighborhood of a monetary cash-in-advance equilibrium.
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Social Sciences and Humanities
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Economics and Econometrics
Authors
Sander van der Hoog,