A dynamic analysis of nash equilibria in search models with fiat money

Federico Bonetto () and Maurizio Iacopetta ()
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Federico Bonetto: School of Mathematics - Georgia Institute of Technology - Georgia Institute of Technology [Atlanta]
Maurizio Iacopetta: OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po, SKEMA Business School

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Abstract: We analyze the rise in the acceptability fiat money in a Kiyotaki–Wright economy by developing a method that can determine dynamic Nash equilibria for a class of search models with genuine heterogeneous agents. We also address open issues regarding the stability properties of pure strategy equilibria and the presence of multiple equilibria, numerical experiments illustrate the liquidity conditions that favor the transition from partial to full acceptance of fiat money, and the effects of inflationary shocks on production, liquidity, and trade.

Keywords: Acceptability of money; Perron; Search (search for similar items in EconPapers)
Date: 2019-10
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03403584v1
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Citations: View citations in EconPapers (1)

Published in Journal of Mathematical Economics, 2019, 84, pp.207-224. ⟨10.1016/j.jmateco.2019.08.002⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:spmain:hal-03403584

DOI: 10.1016/j.jmateco.2019.08.002

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