TY - JOUR
T1 - Bargains, Barter, and Money
AU - Engineer, Merwan
AU - Shi, Shouyong
N1 - Funding Information:
1We thank Ken Burdett, Derek Laing, Kevin Moran, Neil Wallace, Randy Wright, and seminar participants at the Penn State Exchange in Equilibrium Conference 1998, Midwest Macroeconomics Conference in Pittsburgh 1999, and Canadian Economics Association Meetings in Toronto 1999 for valuable comments and suggestions. We are grateful to Social Sciences and Humanities Research Council of Canada for financial support. This paper was previously entitled ‘‘Terms of Trade, Barter, and Fiat Money.’’
PY - 2001/1
Y1 - 2001/1
N2 - We examine a search money model in which there is a symmetric coincidence of wants in all barter matches. However, when bargaining outcomes are asymmetric across matches, the barter economy is inefficient. Then a robust monetary equilibrium exists provided that money holders enjoy adequate bargaining terms. Fiat money may be welfare improving. In contrast to the literature, it is the asymmetry in bargains across matches rather than asymmetry in demands that generates these results. Journal of Economic Literature Classification Numbers: C78, E40.
AB - We examine a search money model in which there is a symmetric coincidence of wants in all barter matches. However, when bargaining outcomes are asymmetric across matches, the barter economy is inefficient. Then a robust monetary equilibrium exists provided that money holders enjoy adequate bargaining terms. Fiat money may be welfare improving. In contrast to the literature, it is the asymmetry in bargains across matches rather than asymmetry in demands that generates these results. Journal of Economic Literature Classification Numbers: C78, E40.
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U2 - 10.1006/redy.2000.0107
DO - 10.1006/redy.2000.0107
M3 - Article
AN - SCOPUS:0012379246
VL - 4
SP - 188
EP - 209
JO - Review of Economic Dynamics
JF - Review of Economic Dynamics
SN - 1094-2025
IS - 1
ER -