Money non-neutrality in a rational belief equilibrium with financial assets (Q5942325)

After an introduction to problems of infinite horizon monetary economies the author uses a Markov competitive equilibrium with initial portfolio holdings as a special stochastic process of prices, portfolios and exogenous shocks with the specified initial portfolio at \(t=0\) in order to define a Markov rational belief equilibrium and discusses it in different directions (e.g. money non-neutrality, endogenous uncertainty, structure of beliefs). Then he deals with computing of such equilibria. His computational procedure is based on B-spline collocation methods approximating the equilibrium price and portfolio policy functions and Monte-Carlo simulations.