We consider a two-period model with missing assets and missing market links, in which money plays a central role and is linked to every instrument in the economy. If there are enough missing market links relative to the ration of outside to inside money, then monetary equilibrium (ME) exists and...

[enter AbsIn a recent paper Túñez (2016) has reviewed the validity of Walras’Law for a Monetary Exchange Economy using a Non-Compensatory Disequilibrium Framework (NCDF). This paper will apply the same theoretical Framework to a Monetary Productive Economy with Bonds to demonstrate that,...

We prove the existence of monetary equilibrium in a finite horizon economy with production. We also show that if agents expect the monetary authority to significantly decrease the supply of bank money available for short term loans in the future, then the economy will fall into a liquidity trap...