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BEGIN:VEVENT
UID:74b2a1641b9be80811a23d4bbb9f35b6
CATEGORIES:Seminars
CREATED:20180110T175918
SUMMARY:Fabrizio Mattesini - Università di Roma "Tor Vergata"
DESCRIPTION;ENCODING=QUOTED-PRINTABLE:<p><span style="font-size: 11pt; font-family: 'Calibri','sans-serif';"><str
 ong>Inflation and Welfare in a Competitive Search Equilibrium with Asymmetr
 ic Information</strong> (with Lorenzo Carbonari and Robert J. Waldmann)</sp
 an></p><p><strong><span style="font-size: 11pt; font-family: 'Calibri','san
 s-serif';">Abstract:</span></strong></p><p style="text-align: justify;"><sp
 an style="font-size: 11pt; font-family: 'Calibri','sans-serif';">We study a
 n economy characterised by indivisible goods, competitive search and asymme
 tric information. As in Lagos and Wright [19], agents need cash to trade in
  a decentralised market; buyers decide their cash holdings after observing 
 the contracts posted by firms and experience match-specific preference shoc
 kswhich remain unknown to sellers. Firms are allowed to post general contra
 cts specifying a price and a probability to trade, but the optimal contract
  implies a single price so that only those who value the good more than tha
 t price are able to trade. When the number of potential buyers is bounded, 
 we show that the real price of the good is decreasing in the rate of inflat
 ion and, consequently, in the nominal rate of interest. Because of asymmetr
 ic information and indivisibility, monetary policy can exploit this relatio
 nship, and welfare is maximised away from the Friedman rule. The same resul
 t, but for a different reason, is obtained when the number of potential buy
 ers is unlimited and buyers face an entry cost. Excessive entry causes a co
 ngestion effect, and an inflationary monetary policy can improve ex ante we
 lfare.</span></p>
DTSTAMP:20260405T192540Z
DTSTART:20180305T164500Z
DTEND:20180305T180000Z
SEQUENCE:0
TRANSP:OPAQUE
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