THE DISTRIBUTION OF MONEY AND PRICES IN SEARCH EQUILIBRIUM

Miguel Molico

International Economic Review, 2006, vol. 47, issue 3, 701-722

Abstract: This article considers a search-theoretic model of monetary exchange. Agents bargain over both the amount of money and the quantity of goods to be exchanged in bilateral meetings, determining endogenously the distributions of money and of prices. I show that money is neutral if changes in the money supply are accomplished via proportional transfers. However, within the class of lump-sum transfers, an increase of the rate of monetary expansion tends to decrease the dispersion of wealth and prices and to improve welfare when inflation is low; but when inflation is high enough, the opposite effects occur. Copyright 2006 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

Date: 2006
References: Add references at CitEc
Citations: View citations in EconPapers (244)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ier:iecrev:v:47:y:2006:i:3:p:701-722

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0020-6598

Access Statistics for this article

International Economic Review is currently edited by Harold L. Cole

More articles in International Economic Review from Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association 160 McNeil Building, 3718 Locust Walk, Philadelphia, PA 19104-6297. Contact information at EDIRC.
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and ().