de O. Cavalcanti, Ricardo and Puzzello, Daniela (2009): Stationarity without Degeneracy in a Model of Commodity Money. Forthcoming in: Economic Theory

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Abstract
We develop a model of macroeconomic heterogeneity inspired by the KiyotakiWright (1989) formulation of commodity money, with the addition of linear utility and idiosyncratic shocks to savings. We consider two environments. In the benchmark case, the consumer in a meeting is chosen randomly. In the auctions case, the individual holding more money can be selected to be the consumer. We show that in both environments socially optimal trading decisions (that are individually acceptable) are stationary and solve a tractable static op timization problem. Savings decisions in the benchmark case are re markably invariant to meanpreserving changes in the distribution of shocks. This result is overturned in the auctions case.
Item Type:  MPRA Paper 

Original Title:  Stationarity without Degeneracy in a Model of Commodity Money 
Language:  English 
Keywords:  Macroeconomics with heterogeneous savings; commodity money with linear adjustments; mechanism design; auctions 
Subjects:  C  Mathematical and Quantitative Methods > C0  General > C00  General E  Macroeconomics and Monetary Economics > E0  General > E00  General 
Item ID:  17125 
Depositing User:  Daniela Puzzello 
Date Deposited:  06. Sep 2009 18:53 
Last Modified:  18. Feb 2013 18:05 
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URI:  https://mpra.ub.unimuenchen.de/id/eprint/17125 