The Distribution of Inventory Holdings in a Pure Exchange Barter Search Economy

Diamond, Peter A.; Yellin, Joel

doi:10.2307/1911243

Cited by 12 publications

(11 citation statements)

References 5 publications

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“…Households mimic the fullinsurance consumption behavior whenever it is possible given their real balances, and they supply a ‡ow of labor no greater than the …rst-best level. Interestingly, this strategy is almost identical to the inventory accumulation strategy in Diamond and Yellin (1985). One can show that on average households spend a fraction (h c F I )= y F I of their time with z y F I .…”

Section: The Real Value Of Moneymentioning

confidence: 73%

“…Except for the …rst term, this corresponds to (4.2) in Diamond and Yellin (1985). It is clear that W (z) is non-decreasing in z.…”

Section: Resultsmentioning

confidence: 98%

“…The strategy we are considering for the accumulation of real balances replicates the inventoryaccumulation strategy in Diamond and Yellin (1985). and U = U (y).…”

Section: Resultsmentioning

confidence: 99%

“…= 1, this ensures that real balances remain constant and equal to their stationary point. 16 Given the unique solution to (16), we can de…ne the time to reach z from z 0 = 0: instance, in the laissez-faire economy where = = 0, the saving rate jumps downward at the target z ? , i.e., s(z) = h > 0 for all z < z ?…”

Section: Proposition 1 (Optimal Lumpy Consumption)mentioning

confidence: 99%

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A tractable model of monetary exchange with ex post heterogeneity

Rocheteau

Weill

Wong³

2018

Theoretical Economics

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We construct a continuous-time new-monetarist economy that displays an endogenous, nondegenerate distribution of money holdings. Properties of equilibria are obtained analytically and equilibria are solved in closed form in a variety of cases. Lump-sum transfers financed with money creation are welfare-enhancing when labor productivity is low whereas regressive transfers approach first best when labor productivity is high and agents are not too impatient. We introduce illiquid government bonds and draw implications for liquidity-trap equilibria. We also study transitional dynamics under quadratic preferences and the velocity of money under heterogeneous preference shocks.

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Section: The Real Value Of Moneymentioning

confidence: 73%

“…Except for the …rst term, this corresponds to (4.2) in Diamond and Yellin (1985). It is clear that W (z) is non-decreasing in z.…”

Section: Resultsmentioning

confidence: 98%

“…The strategy we are considering for the accumulation of real balances replicates the inventoryaccumulation strategy in Diamond and Yellin (1985). and U = U (y).…”

Section: Resultsmentioning

confidence: 99%

Section: Proposition 1 (Optimal Lumpy Consumption)mentioning

confidence: 99%

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A tractable model of monetary exchange with ex post heterogeneity

Rocheteau

Weill

Wong³

2018

Theoretical Economics

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“…The marginal value of real balances in the DM is equal to the marginal utility of DM consumption with probability (a match occurs) and the marginal utility of real balances in the following CM with probability 1 (the buyer is unmatched). We substitute V 0 t+1 (z 0 ) by its expression given by (17) into (10) to obtain the law of motion for the marginal value of real balances:…”

Section: Choice Of Real Balancesmentioning

confidence: 99%

Working through the Distribution: Money in the Short and Long Run

Rocheteau

Weill

Wong

2015

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We construct a tractable model of monetary exchange with search and bargaining that features a nondegenerate distribution of money holdings in which one can study the short-run and long-run effects of changes in the money supply. While money is neutral in the long run, a one-time money injection in a centralized market with flexible prices generates an increase in aggregate real balances in the short run, a decrease in the rate of return of money, and a redistribution of consumption levels across agents. The price level in the short run varies in a non-monotonic fashion with the size of the money injection, e.g., small injections can lead to short-run deflation while large injections generate inflation. We extend our model to include employment risk and show that repeated money injections can raise output and welfare when unemployment is high.

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Information as a substitute for inventories

Dudley

Lasserre

1989

European Economic Review

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The Distribution of Inventory Holdings in a Pure Exchange Barter Search Economy

Cited by 12 publications

References 5 publications

A tractable model of monetary exchange with ex post heterogeneity

A tractable model of monetary exchange with ex post heterogeneity

Working through the Distribution: Money in the Short and Long Run

Information as a substitute for inventories

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