Money, Search, And Costly Matchmaking
AbstractI examine the robustness of monetary equilibriain a random-matching model, where a more efficient mechanismfor trade is available. Agents choose between two tradingsectors: the search and the intermediated sector. In theformer, trade partners arrive randomly and there is atrading externality. In the latter, a costly matchingtechnology provides deterministic double-coincidencematches. Multiple equilibria exist with the extent of costlymatching endogenously determined. Money and mediated trademay coexist. This depends on the size of the probability ofa trade, relative to the cost of deterministic matching.This outcome is inferior for an increasing-returnsexternality. Under certain conditions, regimes with onlycostly matching are welfare superior to monetary regimeswith random matching.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Cambridge University Press in its journal Macroeconomic Dynamics.
Volume (Year): 4 (2000)
Issue (Month): 03 (September)
Contact details of provider:
Postal: The Edinburgh Building, Shaftesbury Road, Cambridge CB2 2RU UK
Fax: +44 (0)1223 325150
Web page: http://journals.cambridge.org/jid_MDYProvider-Email:email@example.com
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Antoine Martin & Michael Orlando & David Skeie, 2006.
"Payment networks in a search model of money,"
263, Federal Reserve Bank of New York.
- Pingle, Mark & Mukhopadhyay, Sankar, 2010.
"Private money as a competing medium of exchange,"
Journal of Macroeconomics,
Elsevier, vol. 32(2), pages 541-554, June.
- Aliprantis, C.D. & Camera, Gabriele & Puzzello, D., 2005.
"Anonymous Markets and Monetary Trading,"
Purdue University Economics Working Papers
1179, Purdue University, Department of Economics.
- Camera, Gabriele, 2001. "Dirty money," Journal of Monetary Economics, Elsevier, vol. 47(2), pages 377-415, April.
- Godfrey Keller & Kevin Roberts & Margaret Stevens, 2007. "Unemployment, Participation and Market Size," Economics Series Working Papers 362, University of Oxford, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Keith Waters).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.