TITLE:
Observationally Equivalent Financial Mechanisms in an OLG Model with Spatial Separation
AUTHORS:
Eisei Ohtaki
KEYWORDS:
Financial Intermediation, Search, Overlapping Generations Model, Spatial Separation, Friedman Rule
JOURNAL NAME:
Theoretical Economics Letters,
Vol.11 No.2,
April
7,
2021
ABSTRACT: This study introduces search frictions into a
variant of overlapping generations environments, as in Smith (2002). In the model,
this study compares financial intermediation to trading shares in decentralized
secondary markets. The results show that
under certain conditions, both financial mechanisms generate the same
equilibrium outcome.