Jorge Rivera C.; Florig, Michael - Departamento de Economía, Facultad de Economía y Negocios - 2005
Although fiat money is useless in standard Arrow-Debreu models, in this paper we will show that this general conclusion … does not hold true when goods are indivisible. In our setting, fiat money is valuable because it facilitates exchange, its … price will always be positive and equilibrium allocations will change with the distribution of fiat money even though it …