Money and finance with costly commitment

• 成果类型: Article
• 署名作者: Chatterjee, S; Corbae, D
• 署名单位: University of Iowa
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• 发表日期: 1996
• 页码: 225-248
• 关键词: commitment problems; asset pricing; money and interest; financial development

摘要

We develop a variant of Townsend's turnpike model where the trading friction is related to a commitment problem rather than spatial separation alone. Specifically, expenditure on financial services is necessary to ensure commitment. When commitment is costless, the equilibrium allocation is equivalent to that from an Arrow sequential markets equilibrium. When commitment is prohibitively expensive, the allocation is similar to the Townsend equilibrium. We use numerical examples to study the consequences of costly commitment for co-existence of money and credit, asset pricing, welfare implications of currency and variations in its growth rate, and the relationships between income and financial development.