Jump to ContentJump to Main Navigation
Barley, Gold, or FiatToward a Pure Theory of Money$
Users without a subscription are not able to see the full content.

Thomas Quint and Martin Shubik

Print publication date: 2014

Print ISBN-13: 9780300188158

Published to Yale Scholarship Online: May 2014

DOI: 10.12987/yale/9780300188158.001.0001

Show Summary Details
Page of

PRINTED FROM YALE SCHOLARSHIP ONLINE (www.yale.universitypressscholarship.com). (c) Copyright Yale University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in YSO for personal use.date: 23 September 2021

Trade with a Money Market

Trade with a Money Market

Chapter:
(p.27) Chapter 4 Trade with a Money Market
Source:
Barley, Gold, or Fiat
Author(s):

Thomas Quint

Martin Shubik

Publisher:
Yale University Press
DOI:10.12987/yale/9780300188158.003.0004

The Basic Model from chapter 3 is altered in two ways. First, the trader types have unequal cash endowments. Second, there is now a money market, whereby Type 1 traders can lend money to Type 2 traders. This means that Type 2 traders have an extra constraint (a “budget constraint”) in their utility maximizations, requiring them to pay back their loans at the end of the game. Again we solve the model, but this time there are three solution zones: 1) where the traders’ cash flow constraints hold loosely; 2) where they hold tightly but the Type 2 traders’ budget constraints hold loosely; and 3) where all constraints hold tightly. We also distinguish among an “enough money well distributed,” an “enough money badly distributed,” and a “not enough money” case in this model.

Keywords:   asymmetric endowments, budget constraint, coordination trap, enough money w.d. vs enough money b.d, money market

Yale Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us.