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An Overlapping-Generations Model with Search

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  • Zhu, Tao

    (Cornell U)

Abstract

Search is embedded in an overlapping-generations model. The young participate in a centralized market, and then are matched in pairs in a decentralized market. The old only participate in the centralized market. If the buyer's bargaining power is sufficiently close to unity in pairwise trade and if the old are risk averse, the golden-rule rate of money transfer is positive. Such risk aversion, the pairwise trade, and dependence of the young's saving on the rate of return are necessary for this result.

Suggested Citation

  • Zhu, Tao, 2007. "An Overlapping-Generations Model with Search," Working Papers 07-09, Cornell University, Center for Analytic Economics.
  • Handle: RePEc:ecl:corcae:07-09
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    File URL: https://cae.economics.cornell.edu/07-09.pdf
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    References listed on IDEAS

    as
    1. Levine, David K., 1991. "Asset trading mechanisms and expansionary policy," Journal of Economic Theory, Elsevier, vol. 54(1), pages 148-164, June.
    2. Abel, Andrew B., 1987. "Optimal monetary growth," Journal of Monetary Economics, Elsevier, vol. 19(3), pages 437-450, May.
    3. Williamson, Steve & Wright, Randall, 1994. "Barter and Monetary Exchange under Private Information," American Economic Review, American Economic Association, vol. 84(1), pages 104-123, March.
    4. Miguel Molico, 2006. "The Distribution Of Money And Prices In Search Equilibrium," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(3), pages 701-722, August.
    5. McCallum, Bennett T., 1983. "The role of overlapping-generations models in monetary economics," Carnegie-Rochester Conference Series on Public Policy, Elsevier, pages 9-44.
    6. Ricardo Lagos & Randall Wright, 2005. "A Unified Framework for Monetary Theory and Policy Analysis," Journal of Political Economy, University of Chicago Press, vol. 113(3), pages 463-484, June.
    7. Alexei Deviatov, 2004. "Money creation in a random matching model," Money Macro and Finance (MMF) Research Group Conference 2003 24, Money Macro and Finance Research Group.
    8. Jonathan Chiu & Miguel Molico, 2011. "Uncertainty, Inflation, and Welfare," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43, pages 487-512, October.
    9. Maeda, Yasuo, 1991. "Fiat money in a pairwise-trading, multi-good, overlapping generations model," Journal of Economic Theory, Elsevier, vol. 54(1), pages 84-97, June.
    10. McCallum, Bennett T., 1983. "The role of overlapping-generations models in monetary economics," Carnegie-Rochester Conference Series on Public Policy, Elsevier, pages 9-44.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money

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