Money Creation in a Random Matching Model

Alexei Deviatov ()

The B.E. Journal of Macroeconomics, 2006, vol. 6, issue 3, 20

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 effects of money creation if individuals are sufficiently risk averse (obtain sufficiently high utility gains from trade) and impatient.

Keywords: inflation; Friedman rule; optimal monetary policy (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (17)

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Working Paper: 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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DOI: 10.2202/1534-5998.1499

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