COWLES FOUNDATION FOR RESEARCH IN ECONOMICS
AT YALE UNIVERSITY

Box 208281
New Haven, CT 06520-8281

COWLES FOUNDATION DISCUSSION PAPER NO. 1427R

Determinacy with Nominal Assets and Outside Money

Pradeep Dubey and John Geanakoplos

Revised November 2004

We build a finite horizon model with inside and outside money, in which interest rates, price levels and commodity allocations are determinate, even though asset markets are incomplete and asset deliveries are purely nominal.

Keywords: Central bank, Inside money, Outside money, Incomplete assets, Monetary equilibrium, Determinacy

JEL Classification: D50, E40, E50, E58