Journal article · 2019
Dynamic monetary equilibrium with a Non-Observed Economy and Shapley and Shubik’s price mechanism
Journal of Macroeconomics 62, 103018
Summary
A general-equilibrium model with inside and outside money, tax-evading households, a government and a central bank. It shows how inflation, as a monetary-policy instrument, interacts dynamically with the size of the non-observed economy, and uses Shapley and Shubik's price mechanism to establish a monetary equilibrium in which formal and informal markets coexist.
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Research theme
Money, credit & monetary policy The non-observed economy
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