Discrete time dynamics in a random matching monetary model

Hector Lomeli () and Ted Loch Temzelides
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Hector Lomeli: Department of Mathematics, ITAM, Mexico City, MEXICO

Economic Theory, 2002, vol. 20, issue 2, 259-269

Abstract: Under take-it-or-leave-it offers, dynamic equilibria in the discrete time random matching model of money are a "translation" of dynamic equilibria in the standard overlapping generations model. This formalizes earlier conjectures about the equivalence of dynamic behavior in the two models and implies the indeterminacy of dynamic equilibria in the random matching model. As in the overlapping generations model, the indeterminacy disappears if an arbitrarily small utility to holding money is introduced. We introduce a different pricing mechanism, one that puts into sharp focus that agents are forward-looking when they interact.

Keywords: Monetary equilibrium; Dynamics; Topological conjugacy. (search for similar items in EconPapers)
JEL-codes: E4 (search for similar items in EconPapers)
Date: 2002-02-26
Note: Received: January 18, 2001; revised version: May 25, 2001
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Citations: View citations in EconPapers (12)

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