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ON RANDOM MATCHING, MONETARY EQUILIBRIA, AND SUNSPOTS

  • Huberto M. Ennis (a1)
  • Published online: 01 February 2001
Abstract

We study comparative statics results for the steady-state monetary equilibria of a simple random matching model of money with endogenous prices and no extrinsic uncertainty. Some of the results appear counterintuitive (both when take-it-or-leave-it offer or when Nash–Rubinstein bargaining is used in the model). Consistency of the equilibrium expectations causes the partial equilibrium intuitions to be reversed. We then proceed to apply the new insights to the analysis of sunspot equilibria in these type of models of bilateral trade with money.

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Corresponding author
Address correspondence to: Huberto M. Ennis, Research Department, Federal Reserve Bank of Richmond, P.O. Box 27622, Richmond, Virginia 23261, USA; e-mail: huberto.ennis@rich.frb.org.
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Macroeconomic Dynamics
  • ISSN: 1365-1005
  • EISSN: 1469-8056
  • URL: /core/journals/macroeconomic-dynamics
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