The Money Rate of Interest and the Influence of Assets in a Multistage Economy with Gold or Paper Money: Part I
Abstract
The role of long lived assets is considered in serving as hostages to extend the domain of trustless trade in an exchange economy. Assuming that individuals have life cycle preferences, we consider the most general set of utility functions consistent with these preferences and a stationary equilibrium for an OLG economy. The influence of the type of asset, durable or storable on the need for money is considered.