Search for a Theory of Money
The classical and early neoclassical economists knew that the essential function of money was its role as a medium of exchange; Recently, this idea has been formalized using search-theoretic noncooperative equilibrium models of the exchange process. The goal of this paper is to use a simple model of this class to analyze four substantive issues in monetary economics: the interaction between specialization and exchange, dual fiat currency regimes, the welfare improving role of money, and the susceptibility of monetary economies to extrinsic uncertainty.
|Date of creation:||Oct 1990|
|Date of revision:|
|Publication status:||published as "A Search-Theoretic Approach to Monetary Economics" American Economic Review, March 1993, pp. 63-77.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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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.
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- Aiyagari, S Rao & Wallace, Neil, 1992. "Fiat Money in the Kiyotaki-Wright Model," Economic Theory, Springer, vol. 2(4), pages 447-64, October.
- Timothy J. Kehoe & Nobuhiro Kiyotaki & Randall Wright, 1991.
"More on money as a medium of exchange,"
140, Federal Reserve Bank of Minneapolis.
- Diamond, Peter A, 1982.
"Aggregate Demand Management in Search Equilibrium,"
Journal of Political Economy,
University of Chicago Press, vol. 90(5), pages 881-94, October.
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