Pairwise-core monetary trade in the Lagos-Wright Model
By: Tai-wei Hu, John Kennan, Neil Wallace.
Contributors: Kennan, John.; Wallace, Neil.; National Bureau of Economic Research.
Series: NBER working paper series -- no. 13310.; Working paper series (National Bureau of Economic Research) -- working paper no. 13310.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 15
Subjects: Monetary policy -- Mathematical models
Description: The Lagos-Wright model has been analyzed using particular trading protocols. Here, weakly and strongly implementable allocations are studied, where weak and strong are used in the sense of (weak) Nash (immune to individual defection) and strong Nash (immune to individual and cooperative pairwise defection). It is shown that the first-best allocation is strongly implementable without intervention for all sufficiently high discount factors. And, if people are free to skip the centralized meeting, then Friedman-rule intervention that uses lump-sum taxation in the centralized meeting to raise the return on money does not enlarge even the set of weakly implementable allocations.
Notes: "August 2007."

Includes bibliographical references (p. 15).

Also available in PDF from the NBER world wide web site (www.nber.org).