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The Two‐money Theorem*
Author(s) -
Narayana Kocherlakota
Publication year - 2002
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/1468-2354.t01-1-00017
Subject(s) - citation , library science , computer science
In this paper, I consider environments in which all shocks have finite support and anytransfer of resources is ex-post voluntary. Let a be an allocation which is achievable whenpotential trading partners know each others" histories. The one-money theorem says that a isachievable using only one money if that money is divisible and moneyholdings are observable.The two-money theorem says that a is achievable using two divisible monies, even ifmoneyholdings are concealable.1. Introduction...