Monetary equilibrium with missing markets

Pradeep Dubey; John Geanakoplos

doi:10.1016/S0304-4068(03)00018-1

Monetary equilibrium with missing markets

Pradeep Dubey
, John Geanakoplos

Economics

Yale University

Research output: Contribution to journal › Article › peer-review

22 Scopus citations

Abstract

We add inside and outside money to the standard GEI model. If there enough gains to trade via money, then monetary equilibrium (ME) exists and money has positive value, even when GEI fails to exist. The nonexistence of GEI shows up as a liquidity trap in terms of the ME. In sharp contrast to GEI, the ME are generically determinate not only in terms of real, but also financial, variables.

Original language	English
Pages (from-to)	585-618
Number of pages	34
Journal	Journal of Mathematical Economics
Volume	39
Issue number	5-6
DOIs	https://doi.org/10.1016/S0304-4068(03)00018-1
State	Published - Jul 2003

Keywords

Bank
Incomplete markets
Inside money
Liquidity trap
Monetary equilibrium
Money
Outside money

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10.1016/S0304-4068(03)00018-1

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abstract = "We add inside and outside money to the standard GEI model. If there enough gains to trade via money, then monetary equilibrium (ME) exists and money has positive value, even when GEI fails to exist. The nonexistence of GEI shows up as a liquidity trap in terms of the ME. In sharp contrast to GEI, the ME are generically determinate not only in terms of real, but also financial, variables.",

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AB - We add inside and outside money to the standard GEI model. If there enough gains to trade via money, then monetary equilibrium (ME) exists and money has positive value, even when GEI fails to exist. The nonexistence of GEI shows up as a liquidity trap in terms of the ME. In sharp contrast to GEI, the ME are generically determinate not only in terms of real, but also financial, variables.

KW - Bank

KW - Incomplete markets

KW - Inside money

KW - Liquidity trap

KW - Monetary equilibrium

KW - Money

KW - Outside money

UR - https://www.scopus.com/pages/publications/0038118649

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DO - 10.1016/S0304-4068(03)00018-1

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VL - 39

SP - 585

EP - 618

JO - Journal of Mathematical Economics

JF - Journal of Mathematical Economics

IS - 5-6

ER -

Monetary equilibrium with missing markets

Abstract

Keywords

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