The Distribution of Money and Prices in an Equilibrium with Lotteries

Aleksander Berentsen, Gabriele Camera and Christopher Waller

No 174, IEW - Working Papers from Institute for Empirical Research in Economics - University of Zurich

Abstract: We construct a tractable model of divisible money and equilibrium heterogeneity in money balances and prices. We do so by considering randomized monetary trades in a standard search-theoretic model of money where agents can hold multiple units of indivisible 'tokens'. By studying a simple trading pattern, we can generate monetary distributions that match those observed in numerically simulated economies with fully divisible money and price heterogeneity.

Keywords: Money; Search; Lotteries; Price Dispersion; Wealth Distribution (search for similar items in EconPapers)
JEL-codes: D83 E40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-mac, nep-mic and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
https://www.zora.uzh.ch/id/eprint/52070/1/iewwp174.pdf (application/pdf)

Related works:
Chapter: The distribution of money and prices in an equilibrium with lotteries (2006)
Journal Article: The distribution of money and prices in an equilibrium with lotteries (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zur:iewwpx:174

Access Statistics for this paper

More papers in IEW - Working Papers from Institute for Empirical Research in Economics - University of Zurich
Bibliographic data for series maintained by Severin Oswald ().