The Distribution of Money and Prices in an Equilibrium with Lotteries
AbstractWe construct a tractable model of divisible money and equilibrium heterogeneity in money balances and prices. We do so by considering randomized monetary trades in a standard search-theoretic model of money where agents can hold multiple units of indivisible 'tokens'. By studying a simple trading pattern, we can generate monetary distributions that match those observed in numerically simulated economies with fully divisible money and price heterogeneity.
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Bibliographic InfoPaper provided by Institute for Empirical Research in Economics - University of Zurich in its series IEW - Working Papers with number 174.
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Money; Search; Lotteries; Price Dispersion; Wealth Distribution;
Other versions of this item:
- Aleksander Berentsen & Gabriele Camera & Christopher Waller, 2004. "The distribution of money and prices in an equilibrium with lotteries," Economic Theory, Springer, vol. 24(4), pages 887-906, November.
- E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-02-01 (All new papers)
- NEP-DGE-2004-02-01 (Dynamic General Equilibrium)
- NEP-MAC-2004-02-01 (Macroeconomics)
- NEP-MIC-2004-02-01 (Microeconomics)
- NEP-MON-2004-02-01 (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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