Money and the Decentralization of Exchange
A pairwise trading process is formulated subject to conditions of nonnegativity of traders' holdings and quid pro quo. It is shown that that: (i) There is a centralized procedure that achieves the equilibrium allocation for an arbitrary economy. (ii) It is not in general possible to find a decentralized procedure that achieves the equilibrium allocation for an arbitrary economy. (iii) In a monetary economy there is a decentralized procedure that achieves the equilibrium allocation. The usefulness of money is that it allows decentralization of the trading process.
|Date of creation:||1973|
|Date of revision:|
|Publication status:||Published in Econometrica (November 1974), 42(6): 1093-1113|
|Contact details of provider:|| Postal: Yale University, Box 208281, New Haven, CT 06520-8281 USA|
Phone: (203) 432-3702
Fax: (203) 432-6167
Web page: http://cowles.yale.edu/
More information through EDIRC
|Order Information:|| Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA|
References listed on IDEAS
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.:
- Ross M. Starr, 1972. "The Structure of Exchange in Barter and Monetary Economies," The Quarterly Journal of Economics, Oxford University Press, vol. 86(2), pages 290-302.
- Joseph M. Ostroy, 1972.
"The Informational Efficiency of Monetary Exchange,"
UCLA Economics Working Papers
021, UCLA Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:cwl:cwldpp:349. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Glena Ames)
If references are entirely missing, you can add them using this form.