On the Existence of Optimal Stationary Equilibria with a Fixed Supply of Fiat Money: I. The Case of a Single Consumer
Journal of Political Economy
1986
This paper generalizes Samuelson's well-known analysis concerning the use of fiat or outside money to support Pareto-optimal allocations in an overlapping- generations framework. While maintaining an elementary demographic structure butexpanding the list of available commodities in each period, we establish the following result: If there is a fixed supply of fiat money, and individuals are also permitted to issue bonds or inside money, then there always exists at least one stationary equilibrium yielding a Pareto-optimal allocation.
- DOI
- 10.1086/261379
- Volume
- 94 (2)
- Pages
- 402-417
- Language
- en
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- Sources
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