A FINITE-HORIZON MONETARY ECONOMY

Conventional wisdom says that there is no demand for money in an econo my of finite duration. In this article we show that this is not necess arily the case. We use a random matching model in which the function o f money is to mediate exchange by alleviating the double coincidence o f wants problem. Towards the end economic activity decreases but this does not affect the ability of money to speed up trade.