Superneutrality

What is it about?

Monetary policy is superneutral in an overlapping genera-tions model. Previous authors have argued that superneu-trality does not hold in such a setting. However, the stand-ard 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 sug-gests that a more realistic representation of monetary poli-cy may generally be helpful.

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