Determinacy of monetary equilibria in an economy with no real risk

This paper examines the determinacy of equilibria in an exchange economy with money and a nominal bond where the only source of uncertainty comes from fluctuations in the money supply. Money plays the role of medium of exchange and, through a cash-in-advance constraint, affects the real allocation. We show that the monetary economy can be transformed into a standard Arrow-Debreu economy, and these two economies have the same equilibrium allocations. Applying the theorem on the finiteness of equilibria by Debreu [3], we prove that the set of monetary equilibria is locally unique, generically for every level of money supply.