Equilibrium Price Dispersion in a Matching Model with Divisible Money
AbstractThe main purpose of this paper is to show that, for any given parameter values, an equilibrium with dispersed prices (two-price equilibrium) exists in a simple matching model with divisible money presented by Green and Zhou (1998).We also show that our two-price equilibrium is unique in certain environments. Moreover, the welfare effect of price dispersion is analysed.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2002-118.
Date of creation: 2002
Date of revision:
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Web page: http://center.uvt.nl
equilibrium analysis; prices; money;
Find related papers by JEL classification:
- D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
- E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-01-19 (All new papers)
- NEP-DGE-2003-01-19 (Dynamic General Equilibrium)
- NEP-MIC-2003-01-20 (Microeconomics)
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.:
- Edward J. Green & Ruilin Zhou, 1996.
"A Rudimentary Random-Matching Model with Divisible Money and Prices,"
GE, Growth, Math methods
9606001, EconWPA, revised 25 Jul 1996.
- Green, Edward J. & Zhou, Ruilin, 1998. "A Rudimentary Random-Matching Model with Divisible Money and Prices," Journal of Economic Theory, Elsevier, vol. 81(2), pages 252-271, August.
- Shouyong Shi, 1995.
"Money and Prices: A Model of Search and Bargaining,"
916, Queen's University, Department of Economics.
- Shi Shougong, 1995. "Money and Prices: A Model of Search and Bargaining," Journal of Economic Theory, Elsevier, vol. 67(2), pages 467-496, December.
- Kiyotaki, Nobuhiro & Wright, Randall, 1989. "On Money as a Medium of Exchange," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 927-54, August.
- Shouyong Shi, 1996.
"A Divisible Search Model of Fiat Money,"
930, Queen's University, Department of Economics.
- Camera, G. & Corbae, D., 1998.
"Money and Price Dispersion,"
98-03, University of Iowa, Department of Economics.
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