Contagion Equilibria in a Monetary Model

6 Pages Posted: 23 Dec 2014

See all articles by Charalambos D. Aliprantis

Charalambos D. Aliprantis

Purdue University - Krannert School of Management

Gabriele Camera

Chapman University - Economic Science Institute; University of Bologna - Dept. of Economics

Daniela Puzzello

Indiana University Bloomington - Department of Economics

Date Written: December 22, 2014

Abstract

The model of Lagos and Wright [9] alters the meeting friction of the typical search model of money to obtain degeneracy in equilibrium holdings and enhance analytical tractability. It introduces a round of Walrasian ‘centralized’ trading after each round of bilateral random ‘decentralized’ trading. The basic premise is that, although the population meets repeatedly in the centralized market, anonymity and random pairings are frictions sufficient for money to be essential (see [9, p. 466] or [11, p. 175]; for the essentiality see [6, 8]).

Suggested Citation

Aliprantis, Charalambos D. and Camera, Gabriele and Puzzello, Daniela, Contagion Equilibria in a Monetary Model (December 22, 2014). Available at SSRN: https://ssrn.com/abstract=2541955 or http://dx.doi.org/10.2139/ssrn.2541955

Charalambos D. Aliprantis

Purdue University - Krannert School of Management ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States

Gabriele Camera (Contact Author)

Chapman University - Economic Science Institute ( email )

Orange, CA 92866
United States

HOME PAGE: http://www1.chapman.edu/~camera/

University of Bologna - Dept. of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

Daniela Puzzello

Indiana University Bloomington - Department of Economics ( email )

Wylie Hall
Bloomington, IN 47405-6620
United States

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