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A uniqueness proof for monetary steady state

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  • Wright, Randall

Abstract

The framework in Lagos and Wright (2005) [20] combining decentralized and centralized markets is used extensively in monetary economics. Much is known about that model, but there is a loose end: only under special assumptions about bargaining power or decentralized market preferences has it been shown that the monetary steady state is unique. For general decentralized market utility and bargaining, I prove uniqueness for generic parameters with fiat money, and for all parameters with commodity money. As a corollary, I get monotone comparative statics.

Suggested Citation

  • Wright, Randall, 2010. "A uniqueness proof for monetary steady state," Journal of Economic Theory, Elsevier, vol. 145(1), pages 382-391, January.
    • Handle: RePEc:eee:jetheo:v:145:y:2010:i:1:p:382-391
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    Keywords

    Monetary equilibrium Uniqueness;

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