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Social and Behavioral Sciences Commons™
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Full-Text Articles in Social and Behavioral Sciences
Monetary Equilibrium With Missing Markets, Pradeep Dubey, John Geanakoplos
Monetary Equilibrium With Missing Markets, Pradeep Dubey, John Geanakoplos
Cowles Foundation Discussion Papers
We consider a two-period model with missing assets and missing market links, in which money plays a central role and is linked to every instrument in the economy. If there are enough missing market links relative to the ratio of outside to inside money, then monetary equilibrium (ME) exists and money has positive value. The nonexistence of GEI (of the underlying economy) shows up as a liquidity trap in terms of the ME. In sharp contrast to GEI, the ME are generally determinate not only in terms of real, but also financial, variables.
From Nash To Walras Via Shapley-Shubik, Pradeep Dubey, John Geanakoplos
From Nash To Walras Via Shapley-Shubik, Pradeep Dubey, John Geanakoplos
Cowles Foundation Discussion Papers
We derive the existence of a Walras equilibrium directly from Nash’s theorem on noncooperative games. No price player is involved, nor are generalized games. Instead we use a variant of the Shapley-Shubik trading-post game.