In this paper, we investigate equilibrium cycles in dynamic general equilibrium models
with cash-in-advance constraints. Our findings are two-fold. First, in such models, if
an equilibrium cycle exists, then there also exists a continuum of equilibrium cycles in
its neighborhood. Second, the limit cycle, to which a dynamic path converges, varies
continuously according to the initial distribution of the money holdings. Thus, temporary
shocks that affect the initial distribution have permanent effects in such models; that is,
such models exhibit hysteresis. Furthermore, we also explore the logic behind the results.
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