Money and the Decentralization of Exchange
AbstractA pairwise trading process is formulated subject to conditions of nonnegativity of traders' holdings and quid pro quo. It is shown that that: (i) There is a centralized procedure that achieves the equilibrium allocation for an arbitrary economy. (ii) It is not in general possible to find a decentralized procedure that achieves the equilibrium allocation for an arbitrary economy. (iii) In a monetary economy there is a decentralized procedure that achieves the equilibrium allocation. The usefulness of money is that it allows decentralization of the trading process.
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Bibliographic InfoPaper provided by Cowles Foundation for Research in Economics, Yale University in its series Cowles Foundation Discussion Papers with number 349.
Length: 52 pages
Date of creation: 1973
Date of revision:
Publication status: Published in Econometrica (November 1974), 42(6): 1093-1113
Note: CFP 422.
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Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA
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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.:
- Joseph M. Ostroy, 1972.
"The Informational Efficiency of Monetary Exchange,"
UCLA Economics Working Papers
021, UCLA Department of Economics.
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