A Dynamic General Equilibrium Model of MX Adoption
I write down a dynamic general equilibrium monetary model of the adoption of financial technologies. Producers/consumers are permitted to spend resources - “adopt a financial technology” - to avoid a cash-in-advance constraint. The model includes a complete accounting of the flows of cash and securities among a continuum of heterogeneous agents. Stationary equilibria of the model are shown to be very similar - and in special cases identical - to the static monetary model of Mulligan and Sala-i-Martin (1996).
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© copyright 1997-1998 by Casey B. Mulligan.