On the Role of Paper Money in General Equilibrium Model without Transactions Costs

Atsushi Kajii

No 1994008, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: It is well known that a competititve equilibrium may fail to exist when preferences are possibly satiated. We show that this non-existence problem does not arise if one of the commodities is paper money. Moreover, an equilibrium is Pareto efficient in the economy with money. This paper therefore gives an economic solution to the classical problem of non-existence of competitive equilibria cause by satiation.

JEL-codes: D50 D52 E41 (search for similar items in EconPapers)
Date: 1994-01-01
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:1994008

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