Bargains, Barter and Money

Merwan Engineer () and Shouyong Shi

Review of Economic Dynamics, 2001, vol. 4, issue 1, 188-209

Abstract: We examine a search money model in which there is a symmetric coincidence of wants in all barter matches. However, when bargaining outcomes are asymmetric across matches, the barter economy is inefficient. Then a robust monetary equilibrium exists provided that money holders enjoy adequate bargaining terms. Fiat money may be welfare inproving. In contrast to the literature, it is the assymmetry in bargains across matches rather than asymmetry in demands that generates these results. (Copyright: Elsevier)

Keywords: bargaining; barter; fiat; money; search (search for similar items in EconPapers)
JEL-codes: C78 E40 (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (8)

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DOI: 10.1006/redy.2000.0107

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