This paper establishes that the pro�t-seeking activities of private intermediaries can ensure Pareto e�ciency in the standard pure-exchange monetary overlapping generations economy without the need for government monetary or �scal policy intervention. Moreover, these...

First Welfare Theorem fails to hold for standard pure exchange overlapping generations economies because no agent exploits the profit opportunities which can arise from mediating intertemporal trade. This paper modifies the standard economy by introducing an optimizing corporate intermediary...