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R. Vijay Krishna
''Non-robustness of the cash-in-advance equilibrium in the trading post model''
( 2005, Vol. 5 No.3 )
The main justification for cash-in-advance (CIA) equilibria when there are multiple assets is a Shapley-Shubik trading-post model where the agents coordinate on a particular medium of exchange. Of course, there are other equilibria. We introduce a refinement and show that the CIA equilibrium does not satisfy our refinement while there exist equilibria that do.
JEL: E4 - Money and Interest Rates: General
Manuscript Received : Jan 01 2005 Manuscript Accepted : Jan 10 2005

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