Existence of Monetary Steady States in a Matching Model of Money
Open Access
Author:
Zhu, Tao
Graduate Program:
Economics
Degree:
Doctor of Philosophy
Document Type:
Dissertation
Date of Defense:
July 09, 2002
Committee Members:
Neil Wallace, Committee Chair/Co-Chair James Schuyler Jordan, Committee Member Kalyan Chatterjee, Committee Member Luen Chau Li, Committee Member
Keywords:
matching model existence steady state
Abstract:
Existence of a monetary steady state is established for a random matching model with divisible goods, general individual money holdings, and take-it-or-leave-it offers by consumers. For indivisible money, the only assumption is a lower bound on the marginal utility of consumption at zero. For divisible money, there are two additional assumptions: the marginal utility of consumption at zero is bounded above and there is a finite bound on individual money holdings. In each case, the monetary steady state shown to exist has nice properties: the value function, defined on money holdings, is increasing and strictly concave, and the measure over money holdings has full support.
