Money and the gain from enduring relationships in the turnpike model
This paper presents a stochastic version of Townsend's turnpike model in which the aggregate endowment is distributed randomly between two sets of agents and in which agents of each type are allowed to remain at a trading post for multiple periods. Agents use money as a means of exchange when they meet as strangers but use private securities when they remain paired at the same trading post. Both welfare and the income velocity of money increase monotonically with the length of the trading session.
|Date of creation:||1994|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.richmondfed.org/|
More information through EDIRC
|Order Information:|| Web: http://www.richmondfed.org/publications/ Email: |
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.:
- David K. Levine, 1991.
"Asset Trading Mechanisms and Expansionary Policy,"
Levine's Working Paper Archive
43, David K. Levine.
- Zeldes, Stephen P, 1989.
"Consumption and Liquidity Constraints: An Empirical Investigation,"
Journal of Political Economy,
University of Chicago Press, vol. 97(2), pages 305-46, April.
- Stephen P. Zeldes, . "Consumption and Liquidity Constraints: An Empirical Investigation," Rodney L. White Center for Financial Research Working Papers 16-88, Wharton School Rodney L. White Center for Financial Research.
- Stephen Zeldes, . "Consumption and Liquidity Constraints: An Empirical Investigation," Rodney L. White Center for Financial Research Working Papers 24-85, Wharton School Rodney L. White Center for Financial Research.
- Duncan K. Foley & Martin F. Hellwig, 1975. "Asset Management with Trading Uncertainty," Review of Economic Studies, Oxford University Press, vol. 42(3), pages 327-346.
- Gale, Douglas, 1978. "The core of a monetary economy without trust," Journal of Economic Theory, Elsevier, vol. 19(2), pages 456-491, December.
- Judd, Kenneth L., 1992. "Projection methods for solving aggregate growth models," Journal of Economic Theory, Elsevier, vol. 58(2), pages 410-452, December.
- Scheinkman, Jose A & Weiss, Laurence, 1986. "Borrowing Constraints and Aggregate Economic Activity," Econometrica, Econometric Society, vol. 54(1), pages 23-45, January.
- Frank Hahn, 1973. "On Transaction Costs, Inessential Sequence Economies and Money," Review of Economic Studies, Oxford University Press, vol. 40(4), pages 449-461.
- Manuelli, Rodolfo & Sargent, Thomas J., 2010. "Alternative Monetary Policies In A Turnpike Economy," Macroeconomic Dynamics, Cambridge University Press, vol. 14(05), pages 727-762, November.
When requesting a correction, please mention this item's handle: RePEc:fip:fedrwp:94-07. 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: (William Perkins)
If references are entirely missing, you can add them using this form.