Berentsen, A. and Camera, G. and Waller, C.. (2004) The distribution of money and prices in an equilibrium with lotteries. Economic theory, Vol. 24, H. 4. pp. 887-906.
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Official URL: http://edoc.unibas.ch/dok/A5249086
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Abstract
We construct a tractable `fundamental` model of money with equilibrium heterogeneity in money balances and prices. We do so by considering randomized monetary trades in a standard search-theoretic model of money where agents can hold multiple units of indivisible `tokens` and can offer lotteries on monetary transfers. By studying a simple trading pattern, we can analytically characterize the monetary distribution. Interestingly, such distributions match those observed in numerically simulated economies with fully divisible money and price heterogeneity.
| Faculties and Departments: | 06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Wirtschaftstheorie (Berentsen) |
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| UniBasel Contributors: | Berentsen, Aleksander |
| Item Type: | Article, refereed |
| Article Subtype: | Research Article |
| Publisher: | Springer International |
| ISSN: | 0938-2259 |
| Note: | Publication type according to Uni Basel Research Database: Journal article |
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| Last Modified: | 22 Mar 2012 14:28 |
| Deposited On: | 22 Mar 2012 14:03 |
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