A dynamic analysis of nash equilibria in search models with fiat money

Bonetto, Federico; Iacopetta, Maurizio

doi:10.1016/j.jmateco.2019.08.002

Cited by 3 publications

(3 citation statements)

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“…Indeed, despite its considerable influence on the search literature (see Lagos, Rocheteau, and Wright 2017) KW has hardly been used to perform macroeconomic experiments. Building on a methodology discussed in Iacopetta (2018) and Bonetto and Iacopetta (2018), we show that the connections between microbehavior and aggregate variables offered by the KW framework can shed light on a wide range of facts that have been studied both by macro and development scholars. 1 In particular, the setup allows us to relate the frictions of market transactions and the dynamics of income inequality and productivity to the trading strategies of individuals.…”

Section: Introductionmentioning

confidence: 91%

Asset Dynamics, Liquidity, and Inequality in Decentralized Markets

Iacopetta

Minetti

2018

Economic Inquiry

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The Kiyotaki and Wright model has exerted a considerable influence on the monetary search literature. We argue that the model also delivers important insights into a broader range of macroeconomic and development issues. The analysis studies how market frictions and the liquidity of assets affect the distribution of income. Experiments illustrate how the economy adjusts to shocks to asset returns and to the matching technology. They also deal with long‐run transition. An experiment interprets the reversal of fortune hypothesis as a situation in which an economy with a low‐return asset takes over a similar economy with a high‐return asset. (JEL C61, C63, E41, E27, D63)

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Section: Introductionmentioning

confidence: 91%

Asset Dynamics, Liquidity, and Inequality in Decentralized Markets

Iacopetta

Minetti

2018

Economic Inquiry

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“…The Economic Model we use goes back to Kyiotaki and Wright [8]. For a more detailed discussion of the economic environment, we direct the reader to some relevant recent literature in Economics [3], [7].…”

Section: Economic Modelmentioning

confidence: 99%

Agent-Based Modeling for Studying the Spontaneous Emergence of Money

Russo¹,

Babutsidze

Pereira³

et al. 2022

2022 IEEE/WIC/ACM International Joint Conference on Web Intelligence and Intelligent Agent Technology (WI-IAT)

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A central question in economics is how a society accepts money, defined as a commodity used as a medium of exchange, as an unplanned outcome of the individual interactions. This question has been approached theoretically in the literature and investigated by means of agent-based modeling. While an important aspect of the theory is the individual's speculative behavior, that is, the acceptance of money despite a potential short-term loss, previous work has been unable to reproduce it with boundedly rational agents. We investigate the reasons for the failure of previous work to have boundedly rational agents learn speculative strategies. Starting with an agent-based model proposed in the literature, where the intelligence of the agents is guided by a learning classifier system that is shown to be capable of learning trade strategies (core strategies) that involve short sequences of trades, we test several modifications of the original model and we come up with a set of assumptions that enable the spontaneous emergence of speculative strategies, which explain the emergence of money even when the agents have bounded rationality.

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“…Money is a commonly used commodity to pay (Jain & Ohri, 2020;Hazlett & Luther, 2020). Based on the form, money is divided into commodity money or goods money, fiat money, and electronic money or digital money (Vandezande, 2017;Bonetto & Iacopetta, 2019). Commodity money has the value of use because World Inflation Rate commodity money can be used or consumed.…”

Section: Literature Reviewmentioning

confidence: 99%

Monetary Outlook

Sasongko

Widarni

Bawono

2021

JBFEM

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This paper aims to study the transformation of money in the United States using qualitative content analysis and predict the stability of the internal exchange rate of money by comparing the internal exchange rate of commodity money proxied by gold against crude oil internally. The exchange rate of fiat money proxied by the USD against crude oil and the internal exchange rate of synthetic money proxied by bitcoin against crude oil use the autoregressive threshold (TAR) method in the exchange period. In the great depression, fiat standards, subprime mortgage crisis, Europe experienced a debt crisis until 2017 (1960 - 2017). We compare the internal stability of money for each period in the aggregate using TAR to describe the overall fluctuation of internal exchange rate stability. So it can be seen that the behavior of data movements based on the crisis period experienced is the basis for predicting the stability of the internal exchange rate in the future.

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A dynamic analysis of nash equilibria in search models with fiat money

Cited by 3 publications

References 43 publications

Asset Dynamics, Liquidity, and Inequality in Decentralized Markets

Asset Dynamics, Liquidity, and Inequality in Decentralized Markets

Agent-Based Modeling for Studying the Spontaneous Emergence of Money

Monetary Outlook

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