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A Study on Lucas’ “Expectations and the Neutrality of Money’’
Institute of Social Science, University of Tokyo, Tokyo, Japan
- 1 Institute of Social Science, University of Tokyo, Tokyo, Japan
Theoretical Economics Letters·Volume 02 (2012)·Pages 438–440·Published 19 December 2012·DOI10.4236/tel.2012.25081
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Abstract
This short article shows that the functional equation on the equilibrium price function is more complicated than that considered by Lucas [1], and that modification is required to complete the proof. Furthermore, we shall provide a sufficient condition that guarantees the uniqueness of the equilibrium price function.
KeywordsNeutrality of MoneyFunctional EquationContraction MappingA Sufficient Condition for the Unique Equilibrium Price Function
- R. E. Lucas Jr., “Expectations and the Neutrality of Money,” Journal of Economic Theory, Vol. 4, No. 2, 1972, pp. 103-124. doi:10.1016/0022-0531(72)90142-1
- R. E. Lucas, Jr., “Corrigendum to `Expectations and the Neutrality of Money,” Journal of Economic Theory, Vol. 31, No. 1, 1983, pp. 197-199. doi:10.1016/0022-0531(83)90031-5
- C. G. Small, “Functional Equations and How to Solve Them,” Springer Science + Business Media, New York, 2007.