A dynamic analysis of Nash equilibria in search models with fiat money (Q2338672)

In an economy of KW-type (comp. [\textit{N. Kiyotaki} and \textit{R. Wright}, ``On money as a medium of exchange'', J. Polit. Econ. 97, 927--954 (1989)]) the authors discuss the role of money and get results with respect to emergence of money, monetary equilibria, long run equilibria, commodity or fiat money, their acceptability, rise of money as dynamic problem, stability problems, shocks by inflation). Therefore they first give an historical overview about the recent research in this field and discuss their generalization of the KW-type and then in two big parts they present their new results (theorems, procedures) together with an in-depth economic interpretation followed by a section containing the proofs of their results. Here it is interesting, that for the solutions of systems of ordinary differential equations fundamental solutions are used successfully and also procedures, that integration appear forward as well as backward in time. At the end one finds an interesting discussion on connections between Nash equilibria and Perron's iterative approach to prove his stable manifold theorem (compare f.i. [\textit{C. Robinson}, Dynamical systems. Stability, symbolic dynamics, and chaos. Boca Raton, FL: CRC Press (1995; Zbl 0853.58001)]). In the first of the big parts mentioned above the authors introduce their economy, especially fiat money (from the latin verb fieri), seignorage (money tax), the system of ordinary differential equations describing the evolution of the economy for a given set of strategies, and the definition of a Nash equilibrium as a fixed point followed by discussion of problems in connection with the existence of such a fixed point. This leads in the second of the big parts to Nash steady states, procedures to get them, their stability properties and the numerical construction of equilibria near such states followed by a lot of numerical examples (f.i. about welfare, fiat money and seignorage) and consideration of special cases.