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- Title
DYNAMIC MONETARY EQUILIBRIUM IN A RANDOM MATCHING ECONOMY.
- Authors
Green, Edward J.; Zhou, Ruilin
- Abstract
This article concerns an infinite horizon economy where trade must occur pairwise, using a double auction mechanism, and where fiat money overcomes lack of double coincidence of wants, Traders are anonymous and lack market power. Goods are divisible and perish- able, and are consumed at every date. Preferences are defined by utility-stream overtaking. Money is divisible and not subject to inventory constraints. The evolution of individual and economywide money holdings distributions is characterized. There is a welfare-ordered continuum of single price equilibria, reflecting indeterminacy of the price level rather than of relative prices.
- Subjects
SAVINGS; MARKETS; MONEY; PRICE regulation; QUANTITY theory of money
- Publication
Econometrica, 2002, Vol 70, Issue 3, p929
- ISSN
0012-9682
- Publication type
Article
- DOI
10.1111/1468-0262.00315