Econometrica: Jul 1976, Volume 44, Issue 4
A Theorem on Decentralized Exchange
Paul J. MaddenOstroy and Starr  have recently shown how money (a good which may be traded although it satisfies no excess supply/demand) allows decentralized achievement of competitive equilibrium allocations via a round of bilateral trades. Following Jevons , monetary exchange is here defined as any trade which decreases the utility of any participant. The consequences of this alternative definition for the Ostroy/Starr thesis are investigated and generalized to cover the case where exchange takes place multilaterally (instead of just bilaterally).
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