This paper examines the influence of fashion on wealth accumulation in an economy with two groups of agents. Fashion is modelled as an externality generated by a particular dependence of individual agents' time preference on the two groups' per-capita consumption habits. It is shown that fashion...

In this paper I examine how the socially optimal allocation, and specialization in particular, depends on the extent of the market. I interpret the society’s ability to keep transaction records as the extent of the market and measure it by a probability <InlineEquation ID="Equ1"> <EquationSource Format="TEX">$\rho \in (0,1)$</EquationSource> </InlineEquation> with which the...</equationsource></inlineequation>

We introduce heterogeneous preferences into a tractable model of monetary search to generate price dispersion, and then examine the effects of money growth on price dispersion and welfare. With buyers’ search intensity fixed, we find that money growth increases the range of (real) prices and...

This paper examines the relationship between specialization and the use of money in two versions of the search-theoretic monetary model. The first version establishes a surprising result that specialization is more likely to occur in a barter economy than in a monetary economy. The result is...