Journal of Population Economics

, Volume 19, Issue 3, pp 627–641 | Cite as

Population dynamics and monetary policy

  • Barbara Annicchiarico
  • Alessandro Piergallini
Original Paper


This paper shows that in a general equilibrium model with interest-rate feedback rules of the Taylor-type population dynamics give rise to multiple steady states. Under an active monetary policy, real determinacy occurs only around the steady state with zero net financial wealth, where aggregate consumption is equally distributed among agents of different generations. By contrast, in a neighborhood of the steady state displaying a positive stock of financial wealth and intergenerational inequality, real determinacy requires monetary policy to be passive. Changes in the demographic profile of the economy are shown to have relevant implications for the aggregate accumulation of wealth.


Population dynamics OLG Interest rate rules 

JEL Classification

E31 E52 J10 



We would like to thank Alessandro Cigno, the editor, two anonymous referees, and Giancarlo Marini for their valuable comments and suggestions. We are also grateful to Andrea Costa and Pasquale Scaramozzino for useful discussions. We acknowledge financial support from Il Ministero dell’Istruzione, dell’Università e della Ricerca (MIUR). All remaining errors are ours. A detailed technical appendix is available from the authors upon request.


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Copyright information

© Springer-Verlag 2005

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of Rome Tor VergataRomeItaly

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