A search model of money and circulating private debt with applications to monetary policy

• 成果类型: Article
• 署名作者: Li, YT
• 署名单位: National Tsing Hua University
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/1468-2354.00140
• 发表日期: 2001
• 页码: 925-946
• 关键词: transaction policy; credit; GOVERNMENT; exchange

摘要

A search-theoretic model is used to examine the coexistence of money and circulating private debt. Money is still valued even though there coexists credit which circulates among agents and dominates in the rate of return. When-there coexist multiple equilibria, the equilibrium with credit Pareto dominates the one without credit if money supply is not extremely plentiful. This article also provides some predictions about the effects of monetary policies. A policy of open market operations whereby government discounts less for second-hand debt decreases the value of money, credit, and interest rate prevailing in the market. This policy can also improve welfare by making credit trade feasible when the only equilibrium entails no credit without intervention.