More on money as a medium of exchange

Timothy J Kehoe, Nobuhiro Kiyotaki, Randall Wright

Research output: Contribution to journalArticle

24 Citations (Scopus)

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

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Medium of exchange
Pure strategy equilibrium
Mixed strategy equilibrium
Mixed strategy
Dynamic equilibrium
Pure strategies
Commodity money
Dynamic strategy
Commodities

Cite this

More on money as a medium of exchange. / Kehoe, Timothy J; Kiyotaki, Nobuhiro; Wright, Randall.

In: Economic Theory, Vol. 3, No. 2, 01.06.1993, p. 297-314.

Research output: Contribution to journalArticle

Kehoe, TJ, Kiyotaki, N & Wright, R 1993, 'More on money as a medium of exchange', Economic Theory, vol. 3, no. 2, pp. 297-314. https://doi.org/10.1007/BF01212919
Kehoe, Timothy J ; Kiyotaki, Nobuhiro ; Wright, Randall. / More on money as a medium of exchange. In: Economic Theory. 1993 ; Vol. 3, No. 2. pp. 297-314.
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