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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- Kehoe, Timothy J & Kiyotaki, Nobuhiro & Wright, Randall, 1993.
"More on Money as a Medium of Exchange,"
Springer;Society for the Advancement of Economic Theory (SAET), vol. 3(2), pages 297-314, April.
- Aiyagari, S Rao & Wallace, Neil, 1992. "Fiat Money in the Kiyotaki-Wright Model," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 2(4), pages 447-64, October.
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- P. Diamond, 1980.
"Aggregate Demand Management in Search Equilibrium,"
268, Massachusetts Institute of Technology (MIT), Department of Economics.
- Kiyotaki, Nobuhiro & Wright, Randall, 1989. "On Money as a Medium of Exchange," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 927-54, August.
- King, Robert G. & Plosser, Charles I., 1986. "Money as the mechanism of exchange," Journal of Monetary Economics, Elsevier, vol. 17(1), pages 93-115, January.
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