Decentralized credit and monetary exchange without public record keeping

P. Dean Corbae and Joseph Ritter

Economic Theory, 2004, vol. 24, issue 4, 933-951

Abstract: We relax a standard assumption on the matching technology in a search model of money. In particular, agents may remain in a long-term partnership as long as it is in their self-interest. With this simple modification, it is possible to support self-enforcing, intertemporal trade which resembles credit without a public record keeping device. We examine conditions for co-existence of currency and credit and the welfare gains/losses associated with the introduction of money. Copyright Springer-Verlag Berlin/Heidelberg 2004

Keywords: Search frictions; Partnerships; Gift-giving. (search for similar items in EconPapers)
Date: 2004
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DOI: 10.1007/s00199-003-0418-8

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