We study infinite-horizon monetary economies characterized by trading frictions that originate from random pairwise meetings, and commitment and enforcement limitations. We prove that introducing occasional trade in 'centralized markets' opens the door to an informal enforcement scheme that sustains a non-monetary efficient allocation. All is required is that trading partners be patient and their actions be observable. We then present a matching environment in which trade may occur in large markets and yet agents' trading paths cross at most once. This allows the construction of models in which infinitely lived agents trade in competitive markets where money plays an essential role.
D. Aliprantis, C., Camera, G., Puzzello, D. (2007). Anonymous markets and monetary trading. JOURNAL OF MONETARY ECONOMICS, 54(7), 1905-1928 [10.1016/j.jmoneco.2006.11.002].
Anonymous markets and monetary trading
Camera, G.
;
2007
Abstract
We study infinite-horizon monetary economies characterized by trading frictions that originate from random pairwise meetings, and commitment and enforcement limitations. We prove that introducing occasional trade in 'centralized markets' opens the door to an informal enforcement scheme that sustains a non-monetary efficient allocation. All is required is that trading partners be patient and their actions be observable. We then present a matching environment in which trade may occur in large markets and yet agents' trading paths cross at most once. This allows the construction of models in which infinitely lived agents trade in competitive markets where money plays an essential role.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
