Abstract
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.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 188-209 |
| Number of pages | 22 |
| Journal | Review of Economic Dynamics |
| Volume | 4 |
| Issue number | 1 |
| DOIs | |
| State | Published - Jan 1 2001 |
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All Science Journal Classification (ASJC) codes
- Economics and Econometrics
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Bargains, Barter, and Money. / Engineer, Merwan; Shi, Shouyong.
In: Review of Economic Dynamics, Vol. 4, No. 1, 01.01.2001, p. 188-209.Research output: Contribution to journal › Article
TY - JOUR
T1 - Bargains, Barter, and Money
AU - Engineer, Merwan
AU - Shi, Shouyong
PY - 2001/1/1
Y1 - 2001/1/1
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.
UR - http://www.scopus.com/inward/record.url?scp=0012379246&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=0012379246&partnerID=8YFLogxK
U2 - 10.1006/redy.2000.0107
DO - 10.1006/redy.2000.0107
M3 - Article
VL - 4
SP - 188
EP - 209
JO - Review of Economic Dynamics
JF - Review of Economic Dynamics
SN - 1094-2025
IS - 1
ER -