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Dmitry Levando

is with the National Research University Higher School of Economics, Moscow, Russian Federation. He holds MA in Computer Science, MA in Economic theory and PhD from Ca Foscari University, Venezia, "Essays on trade and cooperation". His research focuses on non-cooperative games with applications to formation of multiple coalitions and to strategic macroeconomics with default. Along with Maxim Sakharov from Bauman MSTU they develop a computational approach for studying strategic market games with default as an equilibrium phenomenon, including endogenous demand for money.

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Dmitry Levando, M.Sakharov: Micro foundations for money demand as an ill-posed problem

Following default in equilibrium approach of Shubik and Wilson (1977) we construct a numerical approximation for individually motivated demand for credit money. Mathematical properties of the first-order condition are: it is an ill-posed 1-st kind Fredholm equation with inter-dependence of strategy sets of players (a Generalized Nash Game). Resulting fluctuations produce sunspot equilibrium (extrinsic uncertainty), appearing from uncertainty of players about each others' beliefs, not from outside shocks.

Last modified: 2018.11.30.