### 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 |
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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

*Journal of Mathematical Economics*,

*55*(1), 177-185. https://doi.org/10.1016/j.jmateco.2014.09.005

**The instability of some non-full-support steady states in a random matching model of money.** / Huang, Pidong; Igarashi, Yoske.

Research output: Contribution to journal › Article

*Journal of Mathematical Economics*, vol. 55, no. 1, pp. 177-185. https://doi.org/10.1016/j.jmateco.2014.09.005

}

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 -