leadership meets soft budget

Nobuo Akai () and Motohiro Sato
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Motohiro Sato: Hitotsubashi School of International and the Public Policy

No CIRJE-F-391, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: In this paper, it is shown that real indeterminacy of stationary equilibria generically arises in most matching models with perfectly divisible fiat money. In other words, the real indeterminacy follows from the condition for stationarity of money holdings, and surprisingly it has nothing to do with the other specifications, e.g., the bargaining procedures, of the models. Thus if we assume the divisibility of money in money search models, it becomes quite difficult to make accurate predictions of the effects of some policies.

Pages: 58 pages
Date: 2005-12
New Economics Papers: this item is included in nep-mac and nep-mon
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Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:2005cf391

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