Title

Distributional Aspects of the Divisibility of Money: An Example

Document Type

Article

Publication Date

2005

Abstract

I highlight the importance of the distributional aspects of money’s divisibility by comparing a search-theoretic model with random transfers of indivisible money balances, to one with deterministic transfers of partially divisible balances. Randomization allows price flexibility, as if money were fully divisible. Partial divisibility does not, but allows money redistributions. An example of the relevance of such ‘extensive margin’ aspects of divisibility is provided.

Comments

This is a pre-copy-editing, author-produced PDF of an article accepted for publication in Economic Theory, volume 25, issue 2, in 2005 following peer review. The final publication is available at Springer via DOI: 10.1007/s00199-004-0480-x

Peer Reviewed

1

Copyright

Springer