Fiat Money in an Economy with One Nondurable Good and No Credit (A Noncooperative Sequential Game),

The purpose of the report is to provide satisfactory connections between current theories in macroeconomics and microeconomics. This study differs from the majority of past efforts in this direction because in a microeconomic context it focuses on money, credit, and financial institutions. From the point of view of monetary theory, the novelty lies in the efforts to connect individual economic behavior with the behavior of the economy as a whole and to apply mathematical models for this purpose. From the point of view of the more closely related mathematical literature on n-person games and competitive equilibrium analysis, the novelty lies in the efforts to explicitly consider money, credit, and financial institutions. The authors believe that an explicit treatment of money, credit, and financial institutions is necessary for forging links between macroeconomics and microeconomics. Author