A Benefit of Uniform Currency∗
نویسندگان
چکیده
In order to better emulate models with divisible money, we enrich existing random-matching models of international currencies with indivisible monies by introducing randomized trades. The concept of equilibrium is the pairwise core in meetings. We show that there exist equilibrium outcomes in which home and foreign currency play distinct roles. Among these are outcomes with higher observed prices in terms of foreign currency than in terms of home currency. We also show that the best uniform-currency outcome dominates any such outcome in terms of ex ante welfare, for some parameters weakly and for
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