Department of Economics and Business - Universitat Pompeu Fabra

Title:: General preferences for consumption goods in the random matching model of commodity money
Author:: Xavier Cuadras Morató
Date:: September 2003
Abstract:: This paper generalizes the original random matching model of money by Kiyotaki and Wright (1989) (KW) in two aspects: first, the economy is characterized by an arbitrary distribution of agents who specialize in producing a particular consumption good; and second, these agents have preferences such that they want to consume any good with some probability. The results depend crucially on the size of the fraction of producers of each good and the probability with which different agents want to consume each good. KW and other related models are shown to be parameterizations of this more general one.
Keywords:: Commodity money, random matching, general preferences
JEL codes:: C73, D83, E00
Area of Research:: Macroeconomics and International Economics

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