More on money as a medium of exchange

Timothy J. Kehoe, Nobuhiro Kiyotaki, Randall Wright

Research output: Contribution to journalArticle

28 Scopus citations

Abstract

We extend the analysis of Kiyotaki and Wright, who study economies where the commodities that serve as media of exchange (or, commodity money) are determined endogenously. Kiyotaki and Wright consider only steady-state, pure-strategy equilibria; here we allow dynamic and mixed-strategy equilibria. We demonstrate that symmetric, steady-state equilibria in mixed-strategies always exist, while sometimes no such equilibria exist in pure-strategies. We prove that the number of symmetric steady-state equilibria is generically finite. We also show, however, that for some parameter values there exists a continuum of dynamic equilibria. Further, some equilibria display cycles.

Original languageEnglish (US)
Pages (from-to)297-314
Number of pages18
JournalEconomic Theory
Volume3
Issue number2
DOIs
StatePublished - Jun 1 1993
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Fingerprint Dive into the research topics of 'More on money as a medium of exchange'. Together they form a unique fingerprint.

  • Cite this