Páscoa, Mario R.; Petrassi, Myrian; Torres-Martinez, … - Departamento de Economia, Pontifícia Universidade … - 2007
We show that in economies without liquidity frictions, but with incomplete financial markets, when agents are infinitely lived and uniformly impatient, money can still be essential (that is, have a positive price in equilibrium) if and only if each agent has binding debt constraints at some node...
