. We show that the same frictions that give fiat money a positive value generate an inefficient quantity of goods in each …

We construct a search-theoretic model where fiat money coexists with real assets, and all assets can be used as a media … facts: (i) fiat money can be valued despite being dominated in its rate of return; (ii) real assets with identical dividend …

This paper adopts mechanism design to investigate the coexistence of fiat money and higher-return assets. We consider … an economy with pairwise meetings where fiat money and risk-free capital compete as means of payment, as in [28]. The … societyʼs welfare. We show that in any stationary monetary equilibrium capital commands a higher rate of return than fiat money. …

Many search models of money rely on the double coincidence of real wants problem to generate a role for money and, for … the sake of tractability, assume money to be indivisible. In this article, we study the implications of these two … assumptions for the formation of the terms of trades and the purchasing power of money. In the First part of the paper we show …

Modern payment instruments can be complex. Yet, many of these can be interpreted as a form of money or credit, which … credit arrangements? Why is fiat money valued? Why do money and credit coexist? Our simple model can address these basic and …

In Money, Payments, and Liquidity, Ed Nosal and Guillaume Rocheteau provide a comprehensive investigation into the … economics of money and payments by explicitly modeling trading frictions between agents. Adopting the search-theoretic approach … the frictions in the economy that make money and liquid assets play a useful role in trade. They discuss the implications …

We construct a model in which capital competes with fiat money as a medium of exchange, and establish conditions on … fundamentals under which fiat money can be both valued and socially beneficial. When the socially efficient stock of capital is too … rule, fiat money provides just enough liquidity so that agents choose to accumulate the same capital stock a social planner …

I study random-matching economies where at money coexists with real assets, and no restrictions are imposed on payment … the usefulness of at money. The liquidity of the real asset, as measured by its transaction velocity, is shown to depend …

money holdings. Properties of equilibria are obtained analytically and equilibria are solved in closed form in a variety of … cases. Lump-sum transfers financed with money creation are welfare-enhancing when labor productivity is low whereas … preferences and the velocity of money under heterogeneous preference shocks. …