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

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Optimum Quantity of Money; Distribution of Money Holdings; Convergence; Search Equilibrium
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E40 - General; D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D51 - Exchange and Production Economies

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