The Two-Money Theorem

@inproceedings{Kocherlakota1999TheTT,
  title={The Two-Money Theorem},
  author={Narayana Kocherlakota and Ricardo Cavalcanti and Hal Cole and Dean Corbae and Nobu Kiyotaki and B Mccutcheon and Ruilin Zhou},
  year={1999}
}
In this paper, I consider environments in which all shocks have finite support and any transfer of resources is ex-post voluntary. Let α be an allocation which is achievable when potential trading partners know each others’ histories. The one-money theorem says that α is achievable using only one money if that money is divisible and moneyholdings are observable. The two-money theorem says that α is achievable using two divisible monies, even if moneyholdings are concealable. 

From This Paper

Topics from this paper.
7 Citations
8 References
Similar Papers

References

Publications referenced by this paper.
Showing 1-8 of 8 references

Incomplete record-keeping and optimal payment arrangements

  • N. Kocherlakota, N. Wallace
  • 1998
Highly Influential
7 Excerpts

Social norms and random-matching games, Games and Economic Behavior

  • M. Okuno-Fujiwara, A. Postlewaite
  • 1995
Highly Influential
5 Excerpts

A matching model with bounded holdings of indivisible money, Pennsylvania State University working paper

  • A. Taber, N. Wallace
  • 1998
2 Excerpts

Inside and outside money as alternative media of exchange, Pennsylvania State University working paper

  • R. Cavalcanti, N. Wallace
  • Review of Economic Dynamics,
  • 1998
3 Excerpts

Coexistence of money and interest-bearing securities,Journal of Monetary Economics

  • S. R. Aiyagari, N. Wallace, R. Wright
  • 1996
1 Excerpt

Money and storage in a differential information

  • M. Huggett, S. Krasa
  • 1996
3 Excerpts

Money and prices: A model of search and bargaining

  • S. Shi
  • 1995
2 Excerpts

Similar Papers

Loading similar papers…