The Efficiency of Monetary Exchange in Search Equilibrium
AbstractSearch theoretic models of money emphasize monetary exchange as the outcome of economic environments characterized by bilateral trading frictions. This paper analyzes the efficiency of monetary exchange in a search model of fiat money where individuals invest costly effort in the exchange process. Because the optimal effort each individual trader invests in exchange is based upon the private rather than social gains from trade, decentralized monetary equilibria are shown to be inefficient relative to the social optimum. However, for an appropriate division of the gains from trade given to buyers and sellers, it is possible to attain social efficiency. The nature of these search externalities for monetary exchange and their implications for policy are evaluated and discussed. Copyright 1997 by Ohio State University Press.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by Blackwell Publishing in its journal Journal of Money, Credit and Banking.
Volume (Year): 29 (1997)
Issue (Month): 1 (February)
Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Guillaume Rocheteau & Randall Wright, 2003. "Inflation and Welfare in Models with Trading Frictions," PIER Working Paper Archive 03-032, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
- Ricardo Lagos & Guillaume Rocheteau, 2004.
"Inflation, output, and welfare,"
0407, Federal Reserve Bank of Cleveland.
- Marchesiani, Alessandro & Senesi, Pietro, 2007.
"Money and Nominal Bonds,"
9417, University Library of Munich, Germany.
- Huberto M. Ennis, 2007.
"Avoiding the inflation tax,"
07-06, Federal Reserve Bank of Richmond.
- Wilfredo Toledo, 2006. "El dinero en los modelos macroeconómicos," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 8(15), pages 97-116, July-Dece.
- Arias, J.J., 2005. "Search and leisure with idiosyncratic endowment shocks in a random-matching model," Journal of Macroeconomics, Elsevier, vol. 27(3), pages 385-402, September.
- Ben Craig & Guillaume Rocheteau, 2006.
"Inflation and welfare: a search approach,"
Policy Discussion Papers,
Federal Reserve Bank of Cleveland, issue Jan.
- Peter Rupert & Martin Schindler & Andrei Shevchenko & Randall Wright, 2000. "The search-theoretic approach to monetary economics: a primer," Economic Review, Federal Reserve Bank of Cleveland, issue Q IV, pages 10-28.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
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.