Postprint version. Published in Journal of Economic Theory, Volume 74, Issue 2, June 1, 1997, pages 425-434. Copyright © 1997 Elsevier. The definitive version is available at http://dx.doi.org/10.1006/jeth.1996.2264.
NOTE: At the time of publication, the author Eric O'N. Fisher was not yet affiliated with Cal Poly.
This note shows that there are monetary equilibria in the model of overlapping generations that are in the core. Some equilibria have positive stocks of outside money in every generation. These equilibria are thus self-enforcing, and introducing money into an economy need not be tantamount to contriving a new social institution designed to enforce sequential contracts.