Two Monetary Models with Alternating Markets
AbstractWe examine two monetary models with periodic interactions in centralized and decentralized markets: the cash-in-advance model and the model in Lagos and Wright (2005). Given conformity of preferences, technologies and shocks, both models reduce to a single di?erence equation. In stationary equilibrium, such equations coincide when the price distortion present in one model, due to Nash bargaining, is replicated in the other using a tax on cash revenues. In that case, the quantitative implications for the welfare cost of in?ation in each model are also comparable. Di?erences in the model’s performance reduce to di?erences in the pricing mechanism assumed to govern those transactions that must be settled with the exchange of cash.
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Bibliographic InfoPaper provided by Chapman University, Economic Science Institute in its series Working Papers with number 13-25.
Length: 26 pages
Date of creation: 2013
Date of revision:
cash-in-advance; matching; microfoundations; money; in?ation;
Other versions of this item:
- E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
- E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-18 (All new papers)
- NEP-DGE-2013-10-18 (Dynamic General Equilibrium)
- NEP-MAC-2013-10-18 (Macroeconomics)
- NEP-MON-2013-10-18 (Monetary Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Two monetary models with alternating markets
by Christian Zimmermann in NEP-DGE blog on 2014-01-23 21:44:17
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