IDEAS home Printed from https://ideas.repec.org/a/bla/econom/v64y1997i256p547-565.html
   My bibliography  Save this article

Fiat Money and Quality Uncertainty

Author

Listed:
  • Urs Haegler

Abstract

The paper studies the role of money as a medium of exchange when barter trade is restricted not only by the double‐coincidence‐of‐wants requirement but also by private information about the quality of commodities. For this purpose, the model of Kiyotaki and Wright (1989) is extended to include commodities of both high and low quality. It is shown that, despite being intrinsically useless, fiat money may have value in trade because it is of uniform quality. Moreover, the introduction of a sufficiently small amount of fiat money proves to be welfare‐increasing.

Suggested Citation

  • Urs Haegler, 1997. "Fiat Money and Quality Uncertainty," Economica, London School of Economics and Political Science, vol. 64(256), pages 547-565, November.
    • Handle: RePEc:bla:econom:v:64:y:1997:i:256:p:547-565
    DOI: 10.1111/1468-0335.00099
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1468-0335.00099
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1468-0335.00099?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:econom:v:64:y:1997:i:256:p:547-565. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.