Fiat Money and Coordination: A "Perverse" Coexistence of Private Notes and Fiat Money
AbstractThis paper attempts to combine important insights on matching models of money with insights from the macroeconomic coordination game-technological complementarity literature. One important old insight, but which has been refined lately, is that money is imperfect information. Further, one simple specification of incomplete information in particular, which has proven fruitful in motivating outside fiat money in matching environments, is to assume that agents are unidentifiable. This paper adopts this approach. In earlier work, it has also been argued that outside money has a direct role to play in production coordination itself. On the other hand, this paper considers another, and very different, possible aspect of the relationship between outside money and production coordination, in a matching model of incomplete information. Outside fiat money can actually have its very demand induced by the anticipation and realization of a production coordination failure that, in self-fulfilling fashion, its own existence facilitates. Moreover, this perverse demand for outside fiat money coexists with private notes.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Eastern Economic Association in its journal Eastern Economic Journal.
Volume (Year): 31 (2005)
Issue (Month): 3 (Summer)
Contact details of provider:
Postal: c/o Dr. Alexandre Olbrecht, The Anisfield School of Business 205, Ramapo College, 505 Ramapo Valley Road, Ramapo, New Jersey 07430, USA
Phone: (201) 684-7346
Web page: http://www.ramapo.edu/eea/journal.html
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bryant, John, 2002. "Trade, credit and systemic fragility," Journal of Banking & Finance, Elsevier, vol. 26(2-3), pages 475-489, March.
- Ricardo de O. Cavalcanti & Neil Wallace, 1999. "A model of private bank-note issue," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 2(1), pages 104-136, January.
- Russell Cooper & Dean Corbae, 2001. "Financial collapse and active monetary policy: a lesson from the Great Depression," Staff Report 289, Federal Reserve Bank of Minneapolis.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson, College of the Holy Cross).
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.