A Simple Model of Monetary Exchange Based on Nonconvexities and Sunspots∗
نویسندگان
چکیده
We construct a simple model of monetary exchange where, as in Lagos and Wright (2003), trades take place in both centralized and decentralized markets. However, in constrast to Lagos and Wright, we allow for general preferences and introduce nonconvexities (indivisiblities) and sunspots. In the centralized market, agents can trade statecontingent commodities. We show that nonconvexities and sunspots make the model tractable by reducing the heterogeneity generated by the randomness of the trading process in the decentralized market. We show that the allocations in the centralized and decentralized markets are determined independently. In particular, the unemployment rate in the centralized market is indenpendent of inflation. While the allocation in the centralized market is efficient, the allocation in the decentralized market is in general inefficient. ∗We thank the participants of the FRB-Cleveland Monetary Theory Workshop August 2004. The views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of Cleveland or the Federal Reserve System.
منابع مشابه
General equilibrium with nonconvexities and money
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