Finance Assignment Help 44

1 The Role of Inflation in an OLG Model
Imagine you are trying to model an economy using the OLG framework. You have the following assump- tions:
• There is a unique consumption good.
• The agents have the following endowment stream: y Young Endowment = 0 Old
• Population grows at n > 1.
• The utility of the future generations is represented by
ln(c1,t) + ln(c2,t+1)
• The initial old have the following utility function:
ln(c2,1 )
• The initial old are given M0 units of fiat money.
• The central bank has set the rate of growth of the money base at z > 1.
• The fiscal policy uses the income generated from the creation of money as a lump-sum transfer (at) to the young generation each period. This transfer is valued by the young.
a) Discuss the importance of the assumptions made.
b) What is the Social Planner’s Problem? Solve it.
c) Define and solve the competitive equilibrium with changing supply of money.
d) Why is the allocation in c) not Pareto optimal? What is the source of the inefficiency?. How should the monetary policy change to achieve Pareto optimality?
e) Find the inflation rate for this economy in the stationary equilibrium. What explains it?

How it Works

How It works ?

Step 1:- Click on Submit your Assignment here or shown in left side corner of every page and fill the quotation form with all the details. In the comment section, please mention product code mentioned in end of every Q&A Page. You can also send us your details through our email id with product code in the email body. Product code is essential to locate your questions so please mentioned that in your email or submit your quotes form comment section.
Step 2:- While filling submit your quotes form please fill all details like deadline date, expected budget, topic , your comments in addition to product code . The date is asked to provide deadline.
Step 3:- Once we received your assignments through submit your quotes form or email, we will review the Questions and notify our price through our email id. Kindly ensure that our email id and must not go into your spam folders. We request you to provide your expected budget as it will help us in negotiating with our experts.
Step 4:- Once you agreed with our price, kindly pay by clicking on Pay Now and please ensure that while entering your credit card details for making payment, it must be done correctly and address should be your credit card billing address. You can also request for invoice to our live chat representatives.
Step 5:- Once we received the payment we will notify through our email and will deliver the Q&A solution through mail as per agreed upon deadline.
Step 6:-You can also call us in our phone no. as given in the top of the home page or chat with our customer service representatives by clicking on chat now given in the bottom right corner.


Features for Assignment Help

Zero Plagiarism
We believe in providing no plagiarism work to the students. All are our works are unique and we provide Free Plagiarism report too on requests.


We believe in providing perfect, relevant and 100% accurate solutions to the student as per questions asked. All our experts are perfect in providing that so as to give unique experience to the students.


Three Stage Quality Check
We are the only service providers boasting of providing original, relevant and accurate solutions. Our three stage quality process help students to get perfect solutions.



100% Confidential
All our works are kept as confidential as we respect the integrity and privacy of our clients.

Related Services


2 Monetary Policy and the Zero Lower Bound
The following article discusses a potential solution to the Zero Lower Bound problem of monetary policy.
a) Explain the Zero Lower Bound (ZLB) problem of monetary policy and its importance.
b) Plot the federal funds rate upper and lower limits for all available periods. Was the economy in the US limited by this issue during the financial crisis?
c) How did the FED overcome this problem?
d) What other solutions besides the one presented in the article exist to deal with the ZLB problem?
e) Define the lower long-run equilibrium real interest rate and explain its determinants. Should economist expect a shift to a permanently lower long-run equilibrium interest rate?


Product Code :Fin44

To get answer for this question, kindly click here (Note: Don’t forget to write the product code in comment section)

You can also email us at but please mentioned product code in the mail body while sending emails.You can browse more questions to get answer in our Q&A sections here.