Trade Using Assets which are Divisible at a Cost Public Deposited

Creator Series Issue number
  • 288
Date Created
  • 1986-03
Abstract
  • The consequences of costly divisibility of assets are studied using a model with the following features. The demand for assets is generated from an overlapping generations model with a continuum of agents in each generation and with intra-generation trade (intermediation) ruled out. There is a once-for-all supply of a stock of nonnegative-dividend assets in a large size, and there is a costly technology for dividing them into smaller sizes. Stationary equilibria are shown to exist. In contrast with similar models with costless divisibility of assets, competitive equilibria are not necessarily desirable; there can be Pareto-ordered equilibria.

Subject (JEL) Keyword Table of Contents
  • Introduction ; Nondepreciating assets: structure and equilibrium ; Nondepreciating assets : features of stationary equilibria ; Disintegrating assets ; Existence proofs ; Concluding remarks.
Related information Alternative title
  • Trade using assets divisible at a cost / Ramon Marimon, Neil Wallace.
Date Modified
  • 07/12/2019
Corporate Author
  • Federal Reserve Bank of Minneapolis. Research Department
Publisher
  • Federal Reserve Bank of Minneapolis
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