Permanent URL to this publication: http://dx.doi.org/10.5167/uzh-52000
Berentsen, Aleksander; Rocheteau, Guillaume (2002). Money and the Gains from Trade. Working paper series / Institute for Empirical Research in Economics No. 100, University of Zurich.
"This paper studies the role of money in environments where in each meeting there isna double coincidence of real wants. Traders who meet at random finance their purchases through current production, the sale of divisible money or both. It is shown that in the absence of valued money if traders have asymmetric tastes for each other’s good, they produce and exchange socially ine .cient quantities. With valued money, however, traders exchange efficient quantities if the asymmetry of tastes is not too large. It is shown that the gains from trade in the monetary economy are strictly greater than those in the corresponding barter economy, that the Friedman rule holds, and that the allocation of resources in the monetary economy converges to the allocation in the barter economy as the growth rate of the money supply is increased."
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|Item Type:||Working Paper|
|Communities & Collections:||03 Faculty of Economics > Department of Economics
Working Paper Series > Institute for Empirical Research in Economics (former)
|Dewey Decimal Classification:||330 Economics|
|Deposited On:||29 Nov 2011 21:26|
|Last Modified:||09 Jul 2012 05:02|
|Series Name:||Working paper series / Institute for Empirical Research in Economics|
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