ABSTRACT – Fundamental models of money, while explicit about the frictions that render money socially benefi cial, are silent on how agents actually coordinate in its use. This paper studies this coordination problem, providing an endogenous map between the primitives of the environment and the beliefs on the acceptability of money. We show that an increase in the frequency of trade meetings, besides its direct impact on payoffs, facilitates coordination. In particular, for a large enough frequency of trade meetings, agents always coordinate in the use of money. We highlight the underlying properties of money (medium of exchange, record-keeping) that facilitate coordination.
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WP 079 – Real Rigidities and the Cross-Sectional Distribution of Price Stickiness: Evidence from Micro and Macro Data Combined
abril 28, 2015
agosto 14, 2018