• Print
  • Email

Working Papers, No. 1999-15, 1999
Does Commodity Money Eliminate the Indeterminacy of Equilibria?
Previous studies have shown that a random-matching model with divisible at money and without constraint on agents' money inventories possesses a continuum of stationary single-price equilibria. Wallace [10] conjectures that the indeterminacy can be eliminated by the use of commodity money. Instead, I nd that in a similar random-matching model with dividend-yielding commodity money, a continuum of stationary single-price equilibria exists when the utility of dividend is not too high. This result casts doubt on the conventional belief that the indeterminacy of monetary equilibrium is caused only by the nominal nature of money.
Having trouble accessing something on this page? Please send us an email and we will get back to you as quickly as we can.

Federal Reserve Bank of Chicago, 230 South LaSalle Street, Chicago, Illinois 60604-1413, USA. Tel. (312) 322-5322

Copyright © 2024. All rights reserved.

Please review our Privacy Policy | Legal Notices