Dynamic monetary equilibrium in a random matching economy

Edward J. Green, Ruilin Zhou

Research output: Contribution to journalArticle

37 Citations (Scopus)

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 perishable, 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.

Original languageEnglish (US)
Pages (from-to)929-969
Number of pages41
JournalEconometrica
Volume70
Issue number3
DOIs
StatePublished - Jan 1 2002

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Monetary equilibrium
Random matching
Relative prices
Double auction
Traders
Infinite horizon
Market power
Fiat money
Price level
Indeterminacy of equilibrium

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Cite this

Green, Edward J. ; Zhou, Ruilin. / Dynamic monetary equilibrium in a random matching economy. In: Econometrica. 2002 ; Vol. 70, No. 3. pp. 929-969.
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Dynamic monetary equilibrium in a random matching economy. / Green, Edward J.; Zhou, Ruilin.

In: Econometrica, Vol. 70, No. 3, 01.01.2002, p. 929-969.

Research output: Contribution to journalArticle

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