Two Microdynamic Models of Exchange

Two models are presented of real-time exchange and price adjustment for a system of interrelated markets mediated by trade specialists. The first (MBM) features partially decentralized barter exchange in which specialists continuously maintain inventories and periodically adjust prices. A 'correspondence principle' yields existence and efficiency of (steadystate) equilibrium. Local stability follows from a direct argument. The second model (MMM) features fully decentralized money-mediated exchange as well as specialists. Existence, approximate-efficiency, local-stability and asymptotic-neutrality results are derived.