Adv. Math. Econ. Volume 1, pp.127133 (1999)
Determinacy of monetary equilibria in an economy with no real risk
Shinichi Suda
Department of Economics, Keio University, 21545 Mita, Minatoku, Tokyo 1088345, Japan


This paper examines the determinacy of equilibria in an exchange
economy with money and a nominal bond where the only source of uncertainty
comes from fluctuations in the money supply. Money plays the role of medium of
exchange and, through a cashinadvance constraint, affects the real allocation. We
show that the monetary economy can be transformed into a standard ArrowDebreu
economy, and these two economies have the same equilibrium allocations. Applying
the theorem on the finiteness of equilibria by Debreu [3], we prove that the set of
monetary equilibria is locally unique, generically for every level of money supply.


Determinacy, monetary equilibrium, incomplete market