Munich Personal RePEc Archive

On the Distribution of Money Holdings in a Random-Matching Model

Berentsen, Aleksander (2002): On the Distribution of Money Holdings in a Random-Matching Model. Published in: International Economic Review , Vol. 3, No. 43

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Abstract

This paper studies stationary and nonstationary distributions of money holdings in a random-matching model. The first part characterizes the stationary distributions of money holdings and derives the optimum quantity of money. The second part considers nonstationary distributions of the optimum quantity of money to show that if the production costs are not too large, any distribution of the optimum quantity of money converges asymptotically to the uniform distribution.

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