Why Ten $1's Are Not Treated as a $10
We study the stability of monetary steady states in a random matching model of money where money is indivisible, the bound on individual money holding is finite, and the trading protocol is buyer take-it-or-leave-it offers. The class of steady states we study have a non-full-support money-holding distribution and are constructed from the steady states of Zhu (2003). We show that no equilibrium path converges to such steady states if the initial distribution has a different support.
|Date of creation:||30 Apr 2013|
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- Edward J. Green & Ruilin Zhou, 2002.
"Dynamic Monetary Equilibrium in a Random Matching Economy,"
Econometric Society, vol. 70(3), pages 929-969, May.
- Edward J. Green & Ruilin Zhou, 2000. "Dynamic monetary equilibrium in a random-matching economy," Working Paper Series WP-00-1, Federal Reserve Bank of Chicago.
- Huang, Pidong & Igarashi, Yoske, 2015.
"Trejos–Wright with a 2-unit bound: Existence and stability of monetary steady states,"
Mathematical Social Sciences,
Elsevier, vol. 73(C), pages 55-62.
- Huang, Pidong & Igarashi, Yoske, 1/04. "Trejos-Wright with a 2-unit bound: existence and stability of monetary steady states," MPRA Paper 51205, University Library of Munich, Germany.
- Pidong Huang & Yoske Igarashi, 2013. "Trejos-Wright with a 2-unit bound: existence and stability of monetary steady states," Discussion Papers 1311, Exeter University, Department of Economics.
- Huang, Pidong & Igarashi, Yoske, 4/16. "Trejos-Wright with a 2-unit bound: existence and stability of monetary steady states," MPRA Paper 46624, University Library of Munich, Germany.
- Zhu, Tao, 2005.
"Existence of a monetary steady state in a matching model: divisible money,"
Journal of Economic Theory,
Elsevier, vol. 123(2), pages 135-160, August.
- Zhu, Tao, 2003. "Existence of a monetary steady state in a matching model: indivisible money," Journal of Economic Theory, Elsevier, vol. 112(2), pages 307-324, October.
- Hector Lomeli & Ted Temzelides, 2002. "Discrete time dynamics in a random matching monetary model," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 20(2), pages 259-269.
- Wallace, Neil & Zhu, Tao, 2004. "A commodity-money refinement in matching models," Journal of Economic Theory, Elsevier, vol. 117(2), pages 246-258, August.
- Trejos, Alberto & Wright, Randall, 1995. "Search, Bargaining, Money, and Prices," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 118-141, February.
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