CIRJE-F-347 | "A New Technique for Proving the Existence of Monetary Equilibria in Matching Models with Divisible Money" |
Author Name | Kamiya, Kazuya and Takashi Shimizu |
Date | June 2005 |
Full Paper | PDF file@ |
Remarks | Subsequently published as "Existence of Equilibria in Matching Models of Money: A New Technique", Economic Theory 32, 2007, pp447-460. |
Abstract |
This paper develops a new technique for proving the existence of monetary equilibria in money
search models. In money search models with divisible money, the set of equilibria, if it exists, is at
least one-dimensional. We develop a method to prove the existence of such a set in a fairly simple
way. That is, we first find an endpoint of the set of equilibria and then we prove the existence of
a continuum of the set of equilibria from this endpoint. Solving for these equilibria is complicated
otherwise than using our method. Thus, our technique is simple but very powerful. Further,
we consider a rather complicated bargaining procedure that allows us to prove the existence of
equilibria in money search model with perfectly divisible goods and money. |