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Asset dynamics, liquidity and inequality in decentralized markets

Maurizio Iacopetta () and Raoul Minetti
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Raoul Minetti: Michigan State University

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Abstract: The Kiyotakiand Wright model has exerted a considerable influence on the monetary search literature. We argue that the model also delivers important insights into abroader range of macroeconomic and development issues. The analysis studies howmarket frictions and the liquidity of assets affect the distribution of income. Experimentsillustrate how the economy adjusts to shocks to asset returns and to the matchingtechnology. They also deal with long-run transition. An experiment interprets thereversal of fortune hypothesis as a situation in which an economy with a low-returnasset takes over a similar economy with a high-return asset

JEL-codes: C61 C63 E41 E27 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge and nep-mac
Date: 2019-01
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Published in Economic Inquiry, 2019, vol. 57, pp.537-551

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