Why Ten $1’s Are Not Treated as a $10

Pidong Huang and Yoske Igarashi
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Pidong Huang: Korea University
Yoske Igarashi: Department of Economics, University of Exeter

No 1310, Discussion Papers from University of Exeter, Department of Economics

Abstract: We study the stability of monetary steady states in a random matching model of money where money is indivisible, the bound on individual money holding is finite, and the trading protocol is buyer take-it-or-leave-it offers. The class of steady states we study have a non-full-support money-holding distribution and are constructed from the steady states of Zhu (2003). We show that no equilibrium path converges to those steady states if the initial distribution has a different support.

Keywords: random matching model; monetary steady state; instability; Zhu (2003). (search for similar items in EconPapers)
JEL-codes: C62 C78 E40 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-dge, nep-gth, nep-mac and nep-mon
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Citations: View citations in EconPapers (2)

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Working Paper: Why Ten $1's Are Not Treated as a $10 (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:exe:wpaper:1310

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