Decentralized credit and monetary exchange without public record keeping

Dean Corbae; Joe Ritter

doi:10.1007/s00199-003-0418-8

Decentralized credit and monetary exchange without public record keeping

Dean Corbae, Joe Ritter

Applied Economics

Research output: Contribution to journal › Article › peer-review

19 Scopus citations

Abstract

We relax a standard assumption on the matching technology in a search model of money. In particular, agents may remain in a long-term partnership as long as it is in their self-interest. With this simple modification, it is possible to support self-enforcing, intertemporal trade which resembles credit without a public record keeping device. We examine conditions for co-existence of currency and credit and the welfare gains/losses associated with the introduction of money.

Original language	English (US)
Pages (from-to)	933-951
Number of pages	19
Journal	Economic Theory
Volume	24
Issue number	4
DOIs	https://doi.org/10.1007/s00199-003-0418-8
State	Published - Nov 1 2004

Keywords

Gift-giving
Partnerships
Search frictions

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Decentralized credit and monetary exchange without public record keeping

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