The instability of some non-full-support steady states in a random matching model of money
- Authors
- Huang, Pidong; Igarashi, Yoske
- Issue Date
- 12월-2014
- Publisher
- ELSEVIER SCIENCE SA
- Keywords
- Random matching model; Monetary steady state; Instability; Zhu (2003)
- Citation
- JOURNAL OF MATHEMATICAL ECONOMICS, v.55, pp.177 - 185
- Indexed
- SCIE
SSCI
SCOPUS
- Journal Title
- JOURNAL OF MATHEMATICAL ECONOMICS
- Volume
- 55
- Start Page
- 177
- End Page
- 185
- URI
- https://scholar.korea.ac.kr/handle/2021.sw.korea/96676
- DOI
- 10.1016/j.jmateco.2014.09.005
- ISSN
- 0304-4068
- 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 1 is an element of N: money is traded in bundles of 1 units, the support is {0, l, 2l, ..., 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, 2l, ..., lB}. 2014 Elsevier B.V. All rights reserved.
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