We study money creation and destruction in today's monetary architecture within a general equilibrium setting. Two types of money are created and destructed: bank deposits, when banks grant loans to firms or to other banks, and central bank money, when the central bank grants loans to private...

We study money creation and destruction in today's monetary architecture within a general equilibrium setting. Two types of money are created and destructed: bank deposits, when banks grant loans to firms or to other banks, and central bank money, when the central bank grants loans to private...

This note shows that there are monetary equilibria in the model of overlapping generations that are in the core. Some equilibria have positive stocks of outside money in every generation. These equilibria are thus self-enforcing, and introducing money into an economy need not be tantamount to...

We consider a two-period model with missing assets and missing market links, in which money plays a central role and is linked to every instrument in the economy. If there are enough missing market links relative to the ration of outside to inside money, then monetary equilibrium (ME) exists and...

This paper mainly addresses why people are rationally willing to cooperate with one another to accept fiat money from the perspective of decentralized sequential general equilibrium framework by using dynamic game to determine agents' expectation of nominal prices in unrevealed future. The model...

This paper mainly addresses why people are rationally willing to cooperate with one another to accept fiat money from the perspective of decentralized sequential general equilibrium framework by using dynamic game to determine agents' expectation of nominal prices in unrevealed future. The model...

This paper shows that fiat money can be feasible and essential even if the trading horizon is finite and deterministic. The result hinges on two features of our model. First, individual actions can affect the future availability of productive resources. So, agents may be willing to sell for...