Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/189237 
Authors: 
Year of Publication: 
1995
Series/Report no.: 
Queen's Economics Department Working Paper No. 916
Publisher: 
Queen's University, Department of Economics, Kingston (Ontario)
Abstract: 
This paper makes commodities divisible and incorporates bargaining into the search-theoretic model of money to determine the purchasing power of money (or price). It is shown that two monetary equilibria always coexist where flat money is universally accepted. The two equilibria differ in price, output, welfare and the velocity of money. Sunspot monetary equilibria exist in which money is universally accepted in all states of the economy. Multiplicity has novel implications on the effectiveness of currency substitution and exchange market intervention.
JEL: 
E40
C78
Document Type: 
Working Paper

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