We study an economy in which exchange occurs pairwise, there is no commitment, and anonymous agents choose between random monetary trade or deterministic credit trade. To accomplish the latter, agents can exploit a costly technology that allows limited record-keeping, and enforcement. An equilibrium with money and credit is shown to exist if the cost of using the technology is sufficiently small. Anonymity, record-keeping, and enforcement limitations also permit some incidence of default, in equilibrium.
Camera, G., Li, Y. (2008). Another example of a credit system that co-exists with money. JOURNAL OF MONEY, CREDIT, AND BANKING, 40(6), 1295-1308 [10.1111/j.1538-4616.2008.00158.x].
Another example of a credit system that co-exists with money
Camera, Gabriele
;
2008
Abstract
We study an economy in which exchange occurs pairwise, there is no commitment, and anonymous agents choose between random monetary trade or deterministic credit trade. To accomplish the latter, agents can exploit a costly technology that allows limited record-keeping, and enforcement. An equilibrium with money and credit is shown to exist if the cost of using the technology is sufficiently small. Anonymity, record-keeping, and enforcement limitations also permit some incidence of default, in equilibrium.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
