Existence of a monetary steady state in a matching model: indivisible money |
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Authors: | Tao Zhu |
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Institution: | Department of Economics, Cornell University, 442 Uris Hall, Ithaca, NY 14853, USA |
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Abstract: | Existence of a monetary steady state is established for a random matching model with divisible goods, indivisible money, an arbitrary bound on individual money holdings, and take-it-or-leave-it offers by consumers. The background environment is that in papers by Shi and by Trejos and Wright. The monetary steady state shown to exist has nice properties: the value function, defined on money holdings, is strictly increasing and strictly concave, and the measure over money holdings has full support. |
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Keywords: | E40 |
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