Open AccessPosted Content
A search-theoretic approach to monetary economics
Nobuhiro Kiyotaki,Randall Wright +1 more
TLDR
In this paper, a search-theoretic equilibrium model of the exchange process is proposed to capture the double coincidence of wants problem with pure barter. But the model is not tractable.Abstract:
The essential function of money is its role as a medium of exchange. The authors formalize this idea using a search-theoretic equilibrium model of the exchange process that captures the "double coincidence of wants problem" with pure barter. One advantage of the framework described here is that it is very tractable. The authors also show that the model can be used to addre ss some substantive issues in monetary economics, including the potenti al welfare-enhancing role of money, the interaction between specializat ion and monetary exchange, and the possibility of equilibria with multip le fiat currencies. Copyright 1993 by American Economic Association.read more
Citations
More filters
Book
Recursive Macroeconomic Theory
TL;DR: In this paper, an introduction to recursive methods for dynamic macroeconomics is presented, including standard applications such as asset pricing, and advanced material, including analyses of reputational mechanisms and contract design.
Journal ArticleDOI
Over-the-counter markets
TL;DR: In this paper, the authors study how intermediation and asset prices in over-the-counter markets are aected by illiquidity associated with search and bargaining, and compute explicitly the prices at which investors trade with each other as well as marketmakers' bid and ask prices in a dynamic model with strategic agents.
Journal ArticleDOI
A Unified Framework for Monetary Theory and Policy Analysis
TL;DR: In this paper, the authors propose a new framework, based on explicit micro foundations, within which macro policy can be studied and calibrate the model to standard observations and use it to measure the cost of inflation.
Journal ArticleDOI
Search-Theoretic Models of the Labor Market: A Survey
TL;DR: The authors survey the literature on search-theoretic models of the labor market and show how this approach addresses many issues, including: Why workers sometimes choose to remain unemployed, what determines the lengths of employment and unemployment spells, how can there simultaneously exist unemployed workers and unfilled vacancies, how aggregate unemployment and vacancies, homogeneous workers earn different wages, what are the tradeoffs firms face from different wages and how do wages and turnover interact? What determines efficient turnover.
Journal ArticleDOI
Inflation and Welfare
TL;DR: In a monetary economy, it is in everyone's private interest to try to get someone else to hold non-interest-bearing cash and reserves as mentioned in this paper. But someone has to hold it all, so these efforts must simply cancel out.
References
More filters
Journal ArticleDOI
Aggregate Demand Management in Search Equilibrium
TL;DR: In this article, a simple barter model with identical risk-neutral agents where trade is coordinated by a stochastic matching process is analyzed for a simple single-agent setting, and it is shown that there are multiple steady-state rational expectations equilibria, with all non-corner solution equilibrium inefficient.
Journal ArticleDOI
On Money as a Medium of Exchange
Nobuhiro Kiyotaki,Randall Wright +1 more
TL;DR: In this paper, the authors analyze economies in which individuals specialize in consumption and production and meet randomly over time in a way that implies that trade must be bilateral and quid pro quo Nash equilibria in trading strategies are characterized.
Book
Adam Smith today : an inquiry into the nature and causes of the wealth of nations
Adam Smith,Arthur Hugh Jenkins +1 more