Prendergast, Canice; Stole, Lars A. - 2001
This paper explores the private and social benefits from barter exchange in a monetized economy. We first prove a no-trade … theorem regarding the ability of firms with double-coincidences-of-wants to negotiate improvements in trade among themselves …-monetary exchange avoids this limitation and enhances trade by (1) generating liquidity and (2) by segmenting the market place into low …
