Search, Bargaining, Money, and Prices
This goal of this paper is to extend existing search-theoretic models of fiat money, which until now have assumed that the price level is exogenous, by explicitly incorporating bilateral bargaining. This allows the determination of the price level endogenously and leads to additional insights concerning the role of money. For example, the authors find that monetary equilibria are generally inefficient in the sense that output and prices differ from the solution to a social planner's problem, although the difference can become small as the discount rate or search friction vanishes. The authors also find that there exist nonstationary inflationary equilibria. Copyright 1995 by University of Chicago Press.
References listed on IDEAS
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- Rubinstein, Ariel, 1982.
"Perfect Equilibrium in a Bargaining Model,"
Econometric Society, vol. 50(1), pages 97-109, January.
- Ariel Rubinstein, 2010. "Perfect Equilibrium in a Bargaining Model," Levine's Working Paper Archive 661465000000000387, David K. Levine.
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- Cuadras-Morato, Xavier, 1994. "Commodity Money in the Presence of Goods of Heterogeneous Quality," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 4(4), pages 579-591, May.
- Xavier Cuadras, 1993. "Commodity money in the presence of goods of heterogenous quality," Economics Working Papers 40, Department of Economics and Business, Universitat Pompeu Fabra.
- Ostroy, Joseph M. & Starr, Ross M., 1990. "The transactions role of money," Handbook of Monetary Economics, in: B. M. Friedman & F. H. Hahn (ed.), Handbook of Monetary Economics, edition 1, volume 1, chapter 1, pages 3-62 Elsevier.
- Joseph M. Ostroy & Ross M. Starr, 1988. "The Transactions Role of Money," UCLA Economics Working Papers 505, UCLA Department of Economics.
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- Marimon, Ramon & McGrattan, Ellen & Sargent, Thomas J., 1990. "Money as a medium of exchange in an economy with artificially intelligent agents," Journal of Economic Dynamics and Control, Elsevier, vol. 14(2), pages 329-373, May. Full references (including those not matched with items on IDEAS)
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