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Distributional aspects of the divisibility of money. An example

  • Gabriele Camera
Part of the Studies in Economic Theory book series (ECON.THEORY, volume 24)

Summary

I highlight the importance of distributional aspects of money divisibility by comparing a search-theoretic model with random transfers of indivisible money balances, to one with deterministic transfers of partially divisible balances. Randomization allows price flexibility, as if money were fully divisible. Partial divisibility does not, but allows money redistributions. An example of the relevance of such ‘extensive margin’ aspects of divisibility is provided.

Keywords

Extensive Margin Price Dispersion Money Balance Money Transfer Distributional Aspect 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2006

Authors and Affiliations

  • Gabriele Camera
    • 1
  1. 1.Department of Economics, Krannert School of ManagementPurdue UniversityWest LafayetteUSA

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