
Accession Number : AD0713143
Title : EQUILIBRIUM AND DEMAND FOR MEDIA OF EXCHANGE IN A PURE EXCHANGE ECONOMY WITH TRANSACTIONS COSTS,
Corporate Author : YALE UNIV NEW HAVEN CONN COWLES FOUNDATION FOR RESEARCH IN ECONOMICS
Personal Author(s) : Starr,Ross M.
Report Date : 01 OCT 1970
Pagination or Media Count : 32
Abstract : Mathematical general equilibrium analysis has to date developed almost completely without reference to monetary phenomena or money as a commodity. Clearly this leaves us somewhat at sea in looking for a mathematical general equilibrium analysis of a monetary economy. This gap in the theory reflects actually a more fundamental lacuna, the absence of a theory of transactions. Money's primary functionthe one from which its other roles deriveis as a medium of exchange, a facilitator of transactions. But what do transactions look like in a general equilibrium model. The story that is usually told to describe the market of a general equilibrium model is something like this: All the traders get together in one place with an auctioneer. The latter eventually calls out equilibrium prices. All traders then put their excess supplies at those prices into a central pile of goods and withdraw from that pile their excess demands. Because the prices are equilibrium prices, supplies and demands balance and no trader is left with an unsatisfied demand. (Author)
Descriptors : (*ECONOMICS, MANAGEMENT PLANNING AND CONTROL), (*COMMERCE, MATHEMATICAL MODELS), MONEY, COSTS, MATRICES(MATHEMATICS), SET THEORY, DISTRIBUTION(ECONOMICS)
Subject Categories : Economics and Cost Analysis
Operations Research
Distribution Statement : APPROVED FOR PUBLIC RELEASE