Abstract
Zhu (2003) shows existence of full-support monetary steady states with strictly concave value functions in a random matching model with individual money holdings in {0, 1, 2, . . .. , B} for a general B. He also shows that corresponding to each such steady state is an l-replica steady state for each l∈N: money is traded in bundles of l units, the support is {0, l, 2. l, . . .. , lB}, and the value function is a step-function with jumps at points of the support. We show that such l-replicas are unstable if the underlying full-support steady state is a pure strategy steady state and if the support of the initial distribution is not {0, l, 2. l, . . .. , lB}.
| Original language | English |
|---|---|
| Pages (from-to) | 177-185 |
| Number of pages | 9 |
| Journal | Journal of Mathematical Economics |
| Volume | 55 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 2014 |
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Keywords
- Instability
- Monetary steady state
- Random matching model
- Zhu (2003)
ASJC Scopus subject areas
- Economics and Econometrics
- Applied Mathematics
Cite this
The instability of some non-full-support steady states in a random matching model of money. / Huang, Pidong; Igarashi, Yoske.
In: Journal of Mathematical Economics, Vol. 55, No. 1, 2014, p. 177-185.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - The instability of some non-full-support steady states in a random matching model of money
AU - Huang, Pidong
AU - Igarashi, Yoske
PY - 2014
Y1 - 2014
N2 - Zhu (2003) shows existence of full-support monetary steady states with strictly concave value functions in a random matching model with individual money holdings in {0, 1, 2, . . .. , B} for a general B. He also shows that corresponding to each such steady state is an l-replica steady state for each l∈N: money is traded in bundles of l units, the support is {0, l, 2. l, . . .. , lB}, and the value function is a step-function with jumps at points of the support. We show that such l-replicas are unstable if the underlying full-support steady state is a pure strategy steady state and if the support of the initial distribution is not {0, l, 2. l, . . .. , lB}.
AB - Zhu (2003) shows existence of full-support monetary steady states with strictly concave value functions in a random matching model with individual money holdings in {0, 1, 2, . . .. , B} for a general B. He also shows that corresponding to each such steady state is an l-replica steady state for each l∈N: money is traded in bundles of l units, the support is {0, l, 2. l, . . .. , lB}, and the value function is a step-function with jumps at points of the support. We show that such l-replicas are unstable if the underlying full-support steady state is a pure strategy steady state and if the support of the initial distribution is not {0, l, 2. l, . . .. , lB}.
KW - Instability
KW - Monetary steady state
KW - Random matching model
KW - Zhu (2003)
UR - http://www.scopus.com/inward/record.url?scp=84919792413&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84919792413&partnerID=8YFLogxK
U2 - 10.1016/j.jmateco.2014.09.005
DO - 10.1016/j.jmateco.2014.09.005
M3 - Article
AN - SCOPUS:84919792413
VL - 55
SP - 177
EP - 185
JO - Journal of Mathematical Economics
JF - Journal of Mathematical Economics
SN - 0304-4068
IS - 1
ER -