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Full-Text Articles in Social and Behavioral Sciences
A Random Matching Theory, C. D. Aliprantis, Gabriele Camera, D. Puzzello
A Random Matching Theory, C. D. Aliprantis, Gabriele Camera, D. Puzzello
Economics Faculty Articles and Research
We develop theoretical underpinnings of pairwise random matching processes. We formalize the mechanics of matching, and study the links between properties of the different processes and trade frictions. A particular emphasis is placed on providing a mapping between matching technologies and informational constraints.
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 …
Trading Horizons And The Value Of Money, Gabriele Camera, Filip Vesely
Trading Horizons And The Value Of Money, Gabriele Camera, Filip Vesely
Economics Faculty Articles and Research
This paper shows that flat money can be feasible and essential even if the trading horizon is finite and deterministic. The result hinges on two features of our model. First, individual actions can affect the future availability of productive resources. So, agents may be willing to sell for money, even if on that date they have no reason to accept it. This makes monetary trade feasible in all preceding dates. Second, agents are anonymous and direct their search for partners. So, gift-giving arrangements may be prevented because agents can misrepresent their consumption needs. This makes money essential in exploiting any …
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.
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.