The monetary character of trade, the existence of a common medium of exchange, is derived as an outcome of the economic general equilibrium in a class of examples. Two constructs are added to an Arrow-Debreu general equilibrium model: market segmentation with multiple budget constraints (one at...

This paper presents a class of examples where a barter economy develops through agents' optimizing decisions into a monetary economy. A barter economy with m commodities is characterized by m(m-1)/2 commodity pair trading posts for active trade of each good for every other. Monetary equilibrium...

Commodity money arises endogenously in a general equilibrium model with convex transaction cost technology and with separate budget constraints for each transaction. Transaction costs imply differing bid and ask (selling and buying) prices. The most liquid good --- with the smallest...

General equilibrium is investigated with N commodities deliverable at T dates traded spot and futures at ½ N 2T 3 dated commodity-pairwise trading posts. Trade is a resource-using activity recovering transaction costs through the spread between (bid) wholesale) and ask (retail) prices...

The monetary character of trade, the existence of a common medium of exchange, is derived as an outcome of the economic general equilibrium in a class of examples. Two constructs are added to an Arrow-Debreu general equilibrium model: market segmentation with multiple budget constraints (one at...

This paper presents a class of examples where a nonmonetary economy converges in a tatonnement process to a monetary equilibrium. Exchange takes place in organized markets characterized by an array of trading posts where each pair of goods may be traded for one another. A barter equilibrium with...

This study models the bid-ask spread in financial markets as a function of asset price variability and order flow. The market-maker is characterized as passively accepting orders to buy and to sell a security at the market's prevailing price (plus or minus half the bid-ask spread). The bid-ask...

General equilibrium is investigated with N commodities traded at N(N-1)/2 commodity-pairwise trading posts. Trade is a resource-using activity recovering transactions costs through the spread between bid (wholesale) and ask (retail)prices (quoted as commodity rates of exchange). Budget...