Money Creation in a Random Matching Model

Alexei Deviatov ()

No w0081, Working Papers from Center for Economic and Financial Research (CEFIR)

Abstract: I study money creation in versions of the Trejos-Wright (1995) and Shi (1995) models with indivisible money and individual holdings bounded at two units. I work with the same class of policies as in Deviatov and Wallace (2001), who study money creation in that model. However, I consider an alternative notion of implementability–the ex ante pairwise core. I compute a set of numerical examples to determine whether money creation is beneficial. I find beneficial e?ects of money creation if individuals are su?ciently risk averse (obtain su?ciently high utility gains from trade) and impatient.

Keywords: inflation; Friedman rule; optimal monetary policy (search for similar items in EconPapers)
JEL-codes: E31 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2006-09
New Economics Papers: this item is included in nep-cba, nep-dge, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Related works:
Journal Article: Money Creation in a Random Matching Model (2006)
Working Paper: Money Creation in a Random Matching Model (2006)
Working Paper: Money creation in a random matching model (2004)
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