Gold, liquidity and secured loans in a multistage economy Part I: Gold as money

• DOI: 10.1007/bf01226944
• Publication Date: 2005-02-25T12:33:30Z
• Authors: Martin Shubik; Shuntian Yao
• Keywords: 0502 economics and business; 05 social sciences; 8. Economic growth; Gold, exchange economy, Nash equilibrium, trading

A multiperiod exchange economy with gold used both as money and as jewelry is examined in this paper. The existence of Nash equilibria is proved for the market games with finitely many traders as well as the games with a continuum of traders. For market games with a continuum of traders at infinite horizon, the existence of stationary Nash equilibria has been proved under the assumption that gold is properly distributed at the beginning or a secured loan between traders is available.