Pairwise trade and coexistence of money and higher-return assets

Tao Zhu, Neil Wallace

Research output: Contribution to journalArticlepeer-review

34 Scopus citations

Abstract

A new theory of coexistence of money and higher-return assets is set out. It applies to any setting in which some trade involves an exchange of goods for assets and occurs between two people-a buyer and a seller. We show that there exists a function mapping the portfolios of the buyer and the seller to the trade that occurs such that (i) the trade is in the buyer-seller core and (ii) some people are induced to enter the buyer-seller meeting with money.

Original languageEnglish (US)
Pages (from-to)524-535
Number of pages12
JournalJournal of Economic Theory
Volume133
Issue number1
DOIs
StatePublished - Mar 1 2007

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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