Robustness of Stability to cost of carrying money in a Matching Model of Money

Pidong Huang ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper studies stability of monetary steady states in a Trejos-Wright random matching model of money with money holding set {0,1,2} and cost of carrying money. There kinds of steady states exist generically: pure-strategy full-support steady states, mixed-strategy full-support steady state, and non-full-support steady state. Stability analysis shows that full-support steady states are stable and determinate generically and that non-full-support steady state is stable and indeterminate if there is a small positive carrying cost.

Keywords: random matching model; monetary steady state; instability; determinacy; Zhu (2003). (search for similar items in EconPapers)
JEL-codes: E00 (search for similar items in EconPapers)
Date: 2013-04-18
New Economics Papers: this item is included in nep-dge, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:46625

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