Inside versus outside money: indeterminacy in GEI models
In this paper I consider the issue of indeterminacy of equilibrium in a general equilibrium model with incomplete markets and nominal assets. First, I present some classic results on nominal and real indeterminacy in those models. I then proceed to analyse a more recent literature that focused on the role of money in eliminating indeterminacy of the price level. I show that determinacy depends crucially on the presence of outside money in the economy. I also point out some of the limitations of this literature and some possible way out. In the last part I present a paper that deals with indeterminacy in an altogether different way, namely introducing non-competitive intermediaries that design assets and price them.
|Date of creation:||Feb 2002|
|Contact details of provider:|| Postal: Via Del Castro Laurenziano 9, 00161 Roma|
Phone: +39 6 49766353
Fax: +39 6 4462040
Web page: http://www.dipecodir.it/
More information through EDIRC
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.:
- Geanakoplos, John, 1990. "An introduction to general equilibrium with incomplete asset markets," Journal of Mathematical Economics, Elsevier, vol. 19(1-2), pages 1-38.
- Simon, Leo K. & Zame, William R., 1987.
"Discontinous Games and Endogenous Sharing Rules,"
Department of Economics, Working Paper Series
qt8n46v2wv, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Debreu, Gerard, 1970.
"Economies with a Finite Set of Equilibria,"
Econometric Society, vol. 38(3), pages 387-392, May.
- P. Dubey & J. Geanakoplos, 2001.
"Inside and Outside Money, Gains to Trade, and IS-LM,"
Department of Economics Working Papers
01-08, Stony Brook University, Department of Economics.
- Pradeep Dubey & John Geanakoplos, 2000. "Inside and Outside Money, Gains to Trade, and IS-LM," Cowles Foundation Discussion Papers 1257R, Cowles Foundation for Research in Economics, Yale University, revised Jun 2001.
- Pradeep Dubey & John Geanakoplos, 2000. "Inside and Outside Money, Gains to Trade, and IS-LM," Cowles Foundation Discussion Papers 1257, Cowles Foundation for Research in Economics, Yale University.
- BLOISE, Gaetano & DREZE, Jacques H. & POLEMARCHAKIS, Herakles M., "undated".
"Monetary equilibria over an infinite horizon,"
CORE Discussion Papers RP
1750, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Magill,Michael & Quinzii,Martine, 1989.
"Real effects of money in general equilibrium,"
Discussion Paper Serie A
232, University of Bonn, Germany.
- Hellwig, Martin F., 1993. "The challenge of monetary theory," European Economic Review, Elsevier, vol. 37(2-3), pages 215-242, April.
- Radner, Roy, 1972. "Existence of Equilibrium of Plans, Prices, and Price Expectations in a Sequence of Markets," Econometrica, Econometric Society, vol. 40(2), pages 289-303, March.
- Allen, B., 1985. "Continuous random selections from the equilibrium correspondence," CORE Discussion Papers 1985020, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Balasko, Yves & Cass, David, 1989. "The Structure of Financial Equilibrium with Exogenous Yields: The Case of Incomplete Markets," Econometrica, Econometric Society, vol. 57(1), pages 135-162, January.
When requesting a correction, please mention this item's handle: RePEc:sap:wpaper:wp62. 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: (Luisa Giuriato)
If references are entirely missing, you can add them using this form.