Discrete time dynamics in a random matching monetary model

Economic Theory - Tập 20 - Trang 259-269 - 2002
Hector Lomeli1, Ted Temzelides2
1Department of Mathematics, ITAM, Mexico City, MEXICO (e-mail: [email protected]) , , MX
2Department of Economics, University of Iowa, IA 52242, USA (e-mail: [email protected]) , , US

Tóm tắt

Under take-it-or-leave-it offers, dynamic equilibria in the discrete time random matching model of money are a “translation” of dynamic equilibria in the standard overlapping generations model. This formalizes earlier conjectures about the equivalence of dynamic behavior in the two models and implies the indeterminacy of dynamic equilibria in the random matching model. As in the overlapping generations model, the indeterminacy disappears if an arbitrarily small utility to holding money is introduced. We introduce a different pricing mechanism, one that puts into sharp focus that agents are forward-looking when they interact.