<p>In general, <strong>no</strong>.</p>

<p>As you correctly say, No-Ponzi and Transversality imply that the NPV of <em>real</em> bond holdings go to zero. Since we (in general) have not pinned down inflation paths, this does not imply $\lim_t B_t = 0$, as you correctly suspect.</p>

<p>If you can provide more information about what model exactly you work on or the situation you're looking at, I could update my answer.</p>

CC BY-SA 3.0
2014-12-24T08:33:49.240Z
2014-12-24T13:51:22.503Z
2014-12-24T13:51:22.503Z
FooBar
<p>At equilibrium of classical monetary model, does $\lim_{t \rightarrow \infty} B_t = 0$, where $B_t$ represents bond holding has to hold? I was wondering about this question because there is no ponzi solvency condition in classical monetary model, and usually when inequality exists as part of constraints in economics model, they often can be represented as equality at equilibrium.</p>

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2014-12-22T19:59:15.777Z
Please provide some reference or link so that we can be certain about what you mean by "classical monetary model".
Alecos Papadopoulos
<macroeconomics>
Is $\lim_{t \rightarrow \infty} B_t = 0$ at equilibrium in classical monetary model, where $B_t$ represents bond holding?
Miam
# Is $\lim_{t \rightarrow \infty} B_t = 0$ at equilibrium in classical monetary model, where $B_t$ represents bond holding?

(Asked by: username_0 on 2014-12-22)

At equilibrium of classical monetary model, does $\lim\_{t \rightarrow \infty} B\_t = 0$, where $B\_t$ represents bond holding has to hold? I was wondering about this question because there is no ponzi solvency condition in classical monetary model, and usually when inequality exists as part of constraints in economics model, they often can be represented as equality at equilibrium.

**Tags:** macroeconomics

> **Comments:**
> **username_1**: Please provide some reference or link so that we can be certain about what you mean by "classical monetary model".  

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## 1 answers

### Answer by username_2 on 2014-12-24. Score: 2

In general, **no**.

As you correctly say, No-Ponzi and Transversality imply that the NPV of *real* bond holdings go to zero. Since we (in general) have not pinned down inflation paths, this does not imply $\lim\_t B\_t = 0$, as you correctly suspect.

If you can provide more information about what model exactly you work on or the situation you're looking at, I could update my answer.


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