Rivera, Jorge; Florig, Michael - Econometric Society - 2004
In spite of fiat money is useless in a standard Arrow-Debreu model, in this paper we will show that this does not hold … true anymore when goods are indivisible. In our setting, although fiat money yields no utility, its price will always be … positive and the set of equilibrium allocations changes with the distribution of fiat money. Its role lies in the fact that it …