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Modelling the Counterfeiting of Bank Notes: A Literature Review

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The objective of this article is to improve our understanding of counterfeiting and its policy implications by reviewing research in this area. There has been almost no empirical work on counterfeiting because of the limited availability of counterfeiting data and related statistics. The authors therefore focus on theoretical studies that directly model the behaviour of the relevant economic agents. They first establish some stylized facts about counterfeiting to provide a general understanding of the problem. They then briefly review several models of counterfeiting and summarize their relevant insights, focusing on the implications of the findings for the incentive to counterfeit, social welfare and anti-counterfeiting policies. The authors find that the policy implications of these studies support the Bank’s comprehensive anti-counterfeiting strategy.

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Article provided by Bank of Canada in its journal Bank of Canada Review.

Volume (Year): 2011 (2011)
Issue (Month): Autumn ()
Pages: 29-35

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Handle: RePEc:bca:bcarev:v:2011:y:2011:i:autumn11:p:29-35

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