On Money as a Substitute for Perfect Recall

In environments with no commitment and with a need for intertemporal trade, bounded recall is shown to be a sufficient friction for a receipt system (fiat money) to lead to improved allocations in an otherwise frictionless Walrasian model. The absence of other frictions makes price determination tractable, thus the model may be used for quantitative monetary policy experiments. Some issues regarding the divisibility of money are also discussed.

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Year of publication:	2001-02-27
Authors:	Temzelides, Ted ; Yu, Jialin
Institutions:	EconWPA
Subject:	money \| memory \| competitive equilibrium

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Extent:	application/pdf
Series:	Macroeconomics.
Type of publication:	Book / Working Paper
Notes:	Type of Document - pdf; prepared on IBM PC; to print on ;
Classification:	E - Macroeconomics and Monetary Economics ; C6 - Mathematical Methods and Programming
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005076849