This paper adopts mechanism design to investigate the coexistence of fiat money and higher-return assets. We consider … an economy with pairwise meetings where fiat money and risk-free capital compete as means of payment, as in [28]. The … societyʼs welfare. We show that in any stationary monetary equilibrium capital commands a higher rate of return than fiat money. …

A prominent feature of the Kiyotaki–Wright model of commodity money is multiplicity of dynamic equilibria. We show that …

environment with pairwise meetings, the money demand that is consistent with an optimal, incentive feasible allocation takes the …

We study price posting with undirected search in a search-theoretic monetary model with divisible money and divisible … that exhibits quantity discounts. Buyers may spend nothing, a fraction or all of their money holdings, depending on their … fractions of money being spent. …

function of various structural parameters. We show that local indeterminacy occurs through flip and Hopf bifurcations for a …

A challenge to models of equilibrium indeterminacy based on increasing returns is that required increasing returns for … generating indeterminacy can be implausibly large and rise quickly with the relative risk aversion in labor. We show that … unsynchronized wage adjustment via a relative wage effect can both lower the required degree of increasing returns for indeterminacy …