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More on money as a medium of exchange

Author

Listed:
  • Timothy J. Kehoe
  • Nobuhiro Kiyotaki
  • Randall Wright
Abstract
We extend the analysis of Kiyotaki and Wright, who study an economy in which the different commodities that serve as media of exchange are determined endogenously. Kiyotaki and Wright consider only symmetric, steady-state, pure-strategy equilibria, and find that for some parameter values no such equilibria exist. We consider mixed-strategy equilibria and dynamic equilibria. We prove that a steady-state equilibrium exists for all parameter values and that the number of steady-state equilibria is generically finite. We also show, however, that there may be a continuum of dynamic equilibria. Further, some dynamic equilibria display cycles.

Suggested Citation

  • Timothy J. Kehoe & Nobuhiro Kiyotaki & Randall Wright, 1991. "More on money as a medium of exchange," Staff Report 140, Federal Reserve Bank of Minneapolis.
    • Handle: RePEc:fip:fedmsr:140
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    References listed on IDEAS

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