Money in General Equilibrium Theory

This paper establishes the existence of monetary equilibrium in a static economy with a finite number of agents, each described by a preference relation, an endowment of commodities and pure fiat money, and a transactions technology. In addition to typical regularity, the assumption: not trading is Pareto inefficient - provides demand for pure outside fiat money as a medium of exchange, and thereby a positive value for money in equilibrium. The paper includes a discussion of money in general equilibrium theory, including the issues of inefficiency, indeterminacy, non-convexities, and incomplete markets.