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Real Indeterminacy of Stationary Equilibria in Matching Models with Divisible Money

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  • Kazuya Kamiya

    (Faculty of Economics, University of Tokyo)

  • Takashi Shimizu

    (Faculty of Economics, Kansai University)

Abstract

In this paper, it is shown that real indeterminacy of stationary equilibria generically arises in most matching models with perfectly divisible fiat money. In other words, the real indeterminacy follows from the condition for stationarity of money holdings, and surprisingly it has nothing to do with the other specifications, e.g., the bargaining procedures, of the models. Thus if we assume the divisibility of money in money search models, it becomes quite difficult to make accurate predictions of the effects of some policies.

Suggested Citation

  • Kazuya Kamiya & Takashi Shimizu, 2005. "Real Indeterminacy of Stationary Equilibria in Matching Models with Divisible Money," CIRJE F-Series CIRJE-F-390, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2005cf390
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    References listed on IDEAS

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    7. Kazuya Kamiya & Noritsugu Morishita & Takashi Shimizu, 2005. "On the existence of single‐price equilibria in a matching model with divisible money and production cost," International Journal of Economic Theory, The International Society for Economic Theory, vol. 1(3), pages 219-231, September.
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    Cited by:

    1. Kazuya Kamiya & So Kubota & Kayuna Nakajima, 2011. "Efficient estimation and particle filter for max-stable processes," CIRJE F-Series CIRJE-F-792, CIRJE, Faculty of Economics, University of Tokyo.
    2. Kazuya Kamiya & Hajime Kobayashi & Tatsuhiro Shichijo & Takashi Shimizu, 2019. "Efficiency of Monetary Exchange with Divisible Fiat Money: An Experimental Approach," Discussion Paper Series DP2019-21, Research Institute for Economics & Business Administration, Kobe University.
    3. Kamiya, Kazuya & Kubota, So, 2025. "An analytical model of search and bargaining with divisible money," Theoretical Economics, Econometric Society, vol. 20(2), May.
    4. Kubota, So & 久保田, 荘, 2019. "Market Structure and Indeterminacy of Stationary Equilibria in a Decentralized Monetary Economy," Discussion paper series HIAS-E-84, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    5. Kazuya Kamiya & So Kubota & Kayuna Nakajima, 2017. "Real Indeterminacy of Stationary Monetary Equilibria in Centralized Economies," The Japanese Economic Review, Japanese Economic Association, vol. 68(4), pages 497-520, December.
    6. Kazuya Kamiya & Takashi Shimizu, 2005. "A New Technique for Proving the Existence of Monetary Equilibria in Matching Models with Divisible Money," CARF F-Series CARF-F-037, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    7. Jean, Kasie & Rabinovich, Stanislav & Wright, Randall, 2010. "On the multiplicity of monetary equilibria: Green-Zhou meets Lagos-Wright," Journal of Economic Theory, Elsevier, vol. 145(1), pages 392-401, January.
    8. Kazuya Kamiya & Takashi Shimizu, 2007. "Existence of Equilibria in Matching Models of Money: A New Technique," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 32(3), pages 447-460, September.
    9. Kazuya Kamiya, 2019. "On the Real Determinacy and Indeterminacy of Stationary Equilibria in Monetary Models," Discussion Paper Series DP2019-03, Research Institute for Economics & Business Administration, Kobe University, revised Mar 2021.
    10. Kazuya Kamiya & Takashi Shimizu, 2010. "Hysteresis in Dynamic General Equilibrium Models with Cash-in-Advance Constraints," CARF F-Series CARF-F-232, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    11. Kamiya, Kazuya & Shimizu, Takashi, 2011. "Stationary monetary equilibria with strictly increasing value functions and non-discrete money holdings distributions: An indeterminacy result," Journal of Economic Theory, Elsevier, vol. 146(5), pages 2140-2150, September.
    12. Kamiya, Kazuya & Talman, Dolf, 2009. "Matching models with a conservation law: The existence and global structure of the set of stationary equilibria," Journal of Mathematical Economics, Elsevier, vol. 45(5-6), pages 397-413, May.
    13. Kazuya Kamiya & Hajime Kobayashi & Tatsuhiro Shichijo & Takashi Shimizu, 2017. "Equilibrium Selection in Monetary Search Models: An Experimental Approach," Discussion Paper Series DP2017-03, Research Institute for Economics & Business Administration, Kobe University.
    14. Kamiya, Kazuya & Kobayashi, Hajime & Shichijo, Tatsuhiro & Shimizu, Takashi, 2021. "On the monetary exchange with multiple equilibrium money holdings distributions: An experimental approach," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 206-232.
    15. Li, Yiting & Matsui, Akihiko, 2009. "A theory of international currency: Competition and discipline," Journal of the Japanese and International Economies, Elsevier, vol. 23(4), pages 407-426, December.
    16. Cho, In-Koo & Matsui, Akihiko, 2017. "Foundation of competitive equilibrium with non-transferable utility," Journal of Economic Theory, Elsevier, vol. 170(C), pages 227-265.

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