IDEAS home Printed from https://ideas.repec.org/p/tky/fseres/2000cf92.html
   My bibliography  Save this paper

A Theory of Money with Market Places

Author

Listed:
  • Akihiko Matsui

    (Faculty of Economics, University of Tokyo)

  • Takashi Shimizu

    (Faculty of Economics, University of Tokyo)

Abstract

This paper considers an infinitely repeated economy in which divisible fiat money is used to trade goods. The economy has many market places. In each period, each agent chooses a market place, randomly meets someone who comes to the same market place, and they trade their goods when both agree to do so. There exist various classes of stationary equilibria. In some equilibria, all the agents visit the same market place, while in others, market places are specialized, i.e., only one type of good is traded in each active market place. In some equilibria, each good is traded at a single price, while in others, every good is traded at two different prices. Each class itself consists of equilibria with infinitely many price and welfare levels. However, it is shown that only efficient single price equilibria with specialized market places are evolutionarily stable. An inefficient equilibrium is upset by the mutants who visit a new market place to establish a more efficient trading pattern than before. An extension to the case with multiple currencies is also examined.

Suggested Citation

  • Akihiko Matsui & Takashi Shimizu, 2000. "A Theory of Money with Market Places," CIRJE F-Series CIRJE-F-92, CIRJE, Faculty of Economics, University of Tokyo.
  • Handle: RePEc:tky:fseres:2000cf92
    as

    Download full text from publisher

    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2000/2000cf92.pdf
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kazuya Kamiya & Takashi Sato, 2004. "Equilibrium Price Dispersion in a Matching Model with Divisible Money," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(2), pages 413-430, May.
    2. Kazuya Kamiya & Dolf Talman, 2003. "Random Matching Models and Money: The Global Structure and Approximation of the Set of Stationary Equilibria," CIRJE F-Series CIRJE-F-220, CIRJE, Faculty of Economics, University of Tokyo.
    3. Berentsen, Aleksander & Menzio, Guido & Wright, Randall D., 2007. "Inflation and Unemployment: Lagos-Wright meets Mortensen-Pissarides," Kiel Working Papers 1334, Kiel Institute for the World Economy (IfW).
    4. Kamiya, K. & Talman, A.J.J., 2003. "Random Matching Models and Money : The Global Structure and Approximation of Stationary Equilibria," Discussion Paper 2003-70, Tilburg University, Center for Economic Research.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tky:fseres:2000cf92. 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: (CIRJE administrative office). General contact details of provider: http://edirc.repec.org/data/ritokjp.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.