Economic Theory

, Volume 20, Issue 2, pp 259–269 | Cite as

Discrete time dynamics in a random matching monetary model

  • Hector Lomeli
  • Ted Temzelides
Research Article

Summary.

Under take-it-or-leave-it offers, dynamic equilibria in the discrete time random matching model of money are a “translation” of dynamic equilibria in the standard overlapping generations model. This formalizes earlier conjectures about the equivalence of dynamic behavior in the two models and implies the indeterminacy of dynamic equilibria in the random matching model. As in the overlapping generations model, the indeterminacy disappears if an arbitrarily small utility to holding money is introduced. We introduce a different pricing mechanism, one that puts into sharp focus that agents are forward-looking when they interact.

Keywords and Phrases: Monetary equilibrium, Dynamics, Topological conjugacy. 
JEL Classification Numbers: E4. 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2002

Authors and Affiliations

  • Hector Lomeli
    • 1
  • Ted Temzelides
    • 2
  1. 1.Department of Mathematics, ITAM, Mexico City, MEXICO (e-mail: lomeli@itam.mx) MX
  2. 2.Department of Economics, University of Iowa, IA 52242, USA (e-mail: tedt@blue.weeg.uiowa.edu) US

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