CIRJE-F-390 | "Real Indeterminacy of Stationary Equilibria in Matching Models with Divisible Money" |
Author Name | Kamiya, Kazuya and Takashi Shimizu |
Date | November 2005 |
Full Paper | PDF file@ |
Remarks | Subsequently published in Journal of Mathematical Economics 42, 2006, pp. 594-617. |
Abstract |
In this paper, it is shown that real indeterminacy of stationary equilibria generically arises in most matching models with perfectly divisible fiat money. In other words, the real indeterminacy follows from the condition for stationarity of money holdings, and surprisingly it has nothing to do with the other specifications, e.g., the bargaining procedures, of the models. Thus if we assume the divisibility of money in money search models, it becomes quite difficult to make accurate predictions of the effects of some policies. |