relation: https://publications.ut-capitole.fr/id/eprint/26267/
title: Predetermined Interest Rates in a Analytical RBC model
creator: Fève, Patrick
creator: Moura, Alban
creator: Pierrard, Olivier
subject: B- ECONOMIE ET FINANCE
description: We solve a version of the analytical Real Business Cycle (RBC) model with a predetermined rate of return on household saving. The solution differs from that of the benchmark RBC model along two dimensions: (i) Policy functions depend on the variance of the technology shock. (ii) There is a suboptimal pattern of excess saving. We discuss the economic intuition underlying these properties. We also demonstrate that unconditional welfare can be higher in the suboptimal model with predetermined interest rates, providing a clear illustration of the pitfall with unconditional welfare comparisons.
publisher: TSE Working Paper
date: 2018-09
type: Monograph
type: NonPeerReviewed
format: text
language: en
identifier: https://publications.ut-capitole.fr/id/eprint/26267/1/wp_tse_954.pdf
identifier:   Fève, Patrick <https://www.idref.fr/080518311>, Moura, Alban <https://www.idref.fr/203794303> and Pierrard, Olivier <https://www.idref.fr/095042172>  (2018) Predetermined Interest Rates in a Analytical RBC model.  TSE Working Paper, n. 18-954, Toulouse     
relation: http://tse-fr.eu/pub/32949
language: en