Equilibrium of incomplete markets with money and intermediate banking system
AbstractThis paper studies a simple stochastic two-period general equilibrium model with money, an incomplete market of nominal assets, and a competitive banking system, intermediate between consumers and a Central Bank. There is a finite number of agents, consumers and banks. Default is not permitted. The public policy instruments are, besides real taxes implicit in the model, public debt and creation of money, both implemented at the first period. The equilibrium existence is established under a "Gains to trade" hypothesis and the assumption that banks have a nonzero endowment of money at each date-event of the model.
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Bibliographic InfoPaper provided by Université Panthéon-Sorbonne (Paris 1) in its series Cahiers de la Maison des Sciences Economiques with number b06068.
Length: 22 pages
Date of creation: Nov 2006
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Competitive banking system; incomplete markets; nominal assets; money; monetary equilibrium; cash-in-advance constraints; public debt.;
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Find related papers by JEL classification:
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
- D20 - Microeconomics - - Production and Organizations - - - General
- D46 - Microeconomics - - Market Structure and Pricing - - - Value Theory
- D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-11-25 (All new papers)
- NEP-BAN-2006-11-25 (Banking)
- NEP-CBA-2006-11-25 (Central Banking)
- NEP-DGE-2006-11-25 (Dynamic General Equilibrium)
- NEP-MAC-2006-11-25 (Macroeconomics)
- NEP-MON-2006-11-25 (Monetary Economics)
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- repec:hal:cesptp:halshs-00250167 is not listed on IDEAS
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