A simple search model of money with heterogeneous agents and partial acceptability
AbstractSimple search models have equilibria where some agents accept money and others do not. We argue such equilibria should not be taken seriously - which is unfortunate if one wants a model with partial acceptability. We introduce heterogeneous agents and show partial acceptability arises naturally. There can be multiple equilibria with different degrees of acceptability. Given the type of heterogeneity we allow, the model is still simple: equilibria reduce to fixed points in [0,1]. We show that with other forms of heterogeneity, equilibria are generally fixed points in set space, and there exists no method to reduce this to a problem in R1.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Cleveland in its series Working Paper with number 0207.
Date of creation: 2002
Date of revision:
Other versions of this item:
- Andrei Shevchenko & Randall Wright, 2004. "A simple search model of money with heterogeneous agents and partial acceptability," Economic Theory, Springer, Springer, vol. 24(4), pages 877-885, November.
- NEP-ALL-2002-11-04 (All new papers)
- NEP-CBA-2002-11-04 (Central Banking)
- NEP-DGE-2002-11-04 (Dynamic General Equilibrium)
- NEP-MON-2002-10-27 (Monetary Economics)
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