Coexistence of Money and Interest-Bearing Securities Público Deposited

Creator Series Date Created
  • 1995-04
Abstract
  • A pairwise random meeting model with money is used to study the nominal yield on pure-discount, default-free securities that are issued by the government. There is one steady state with matured securities at par and, for some parameters, another with them at a discount. In the former, exogenous rejection of unmatured securities by the government is necessary and sufficient for such a steady state to display a positive nominal yield on unmatured securities. In the latter, the post-maturity discount on securities induces a deeper pre-maturity discount even if there is no exogenous rejection of unmatured securities.

Subject (JEL) Palabra Clave Date Modified
  • 07/11/2019
Corporate Author
  • Federal Reserve Bank of Minneapolis. Research Department.
Publisher
  • Federal Reserve Bank of Minneapolis
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