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Full-Text Articles in Social and Behavioral Sciences
Anonymous Markets And Monetary Trading, C. D. Aliprantis, Gabriele Camera, D. Puzzello
Anonymous Markets And Monetary Trading, C. D. Aliprantis, Gabriele Camera, D. Puzzello
Economics Faculty Articles and Research
We study infinite-horizon monetary economies characterized by trading frictions that originate from random pairwise meetings, and commitment and enforcement limitations. We prove that introducing occasional trade in 'centralized markets' opens the door to an informal enforcement scheme that sustains a non-monetary efficient allocation. All is required is that trading partners be patient and their actions be observable. We then present a matching environment in which trade may occur in large markets and yet agents' trading paths cross at most once. This allows the construction of models in which infinitely lived agents trade in competitive markets where money plays an essential …
Money, Credit, And Banking, Aleksander Berentsen, Gabriele Camera, Christopher Waller
Money, Credit, And Banking, Aleksander Berentsen, Gabriele Camera, Christopher Waller
Economics Faculty Articles and Research
In monetary models where agents are subject to trading shocks there is typically an ex-post inefficiency since some agents are holding idle balances while others are cash constrained. This problem creates a role for financial intermediaries, such as banks, who accept nominal deposits and make nominal loans. In general, financial intermediation improves the allocation. The gains in welfare come from the payment of interest on deposits and not from relaxing borrowers’ liquidity constraints. We also demonstrate that when credit rationing occurs increasing the rate of inflation can be welfare improving.
Contagion Equilibria In A Monetary Model, C. D. Aliprantis, Gabriele Camera, D. Puzzello
Contagion Equilibria In A Monetary Model, C. D. Aliprantis, Gabriele Camera, D. Puzzello
Economics Faculty Articles and Research
This article explores the Monetary Models.