E-barter versus fiat money: will central banks survive?
AbstractNew technology in computing has led some to suggest that the ability to settle transactions electronically will develop to such an extent that money will disappear from use. Two versions of this belief exist. One maintains that there will be 'e-money', issued conceivably by many organisations, and that this will replace central bank money. The other, on which this paper focuses, suggests a further development - that the very concept of a medium of exchange may become redundant, as assets or goods can be exchanged directly for other assets or goods through use of computing. In this paper we argue that the information-economising properties that allowed money to develop will also allow it to survive, despite actual and hypothesised technical progress which reduces the cost of electronic barter.
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 InfoPaper provided by Bank of England in its series Bank of England working papers with number 197.
Date of creation: Aug 2003
Date of revision:
Contact details of provider:
Postal: Publications Group Bank of England Threadneedle Street London EC2R 8AH
Phone: +44 (0)171 601 4030
Fax: +44 (0)171 601 5196
Web page: http://www.bankofengland.co.uk/
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-MON-2003-10-05 (Monetary Economics)
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.:
- Mervyn King, 1999. "Challenges for monetary policy : new and old," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 11-57.
- Dimitrios Tsomocos, 2003.
"Equilibrium Analysis, Banking, Contagion and Financial Fragility,"
OFRC Working Papers Series
2003fe03, Oxford Financial Research Centre.
- Dimitrios P. Tsomocos, 2003. "Equilibrium analysis, banking, contagion and financial fragility," LSE Research Online Documents on Economics 24826, London School of Economics and Political Science, LSE Library.
- Dimitrios Tsomocos, 2003. "Equilibrium analysis, banking, contagion and financial fragility," FMG Discussion Papers dp450, Financial Markets Group.
- Dimitrios P Tsomocos, 2003. "Equilibrium analysis, banking, contagion and financial fragility," Bank of England working papers 175, Bank of England.
- Charles Goodhart, 2000. "Can Central Banking Survive the IT Revolution?," FMG Special Papers sp125, Financial Markets Group.
- Martin Shubik, 2000.
"The Theory of Money,"
Cowles Foundation Discussion Papers
1253, Cowles Foundation for Research in Economics, Yale University.
- Nelson, Edward, 2002.
"Direct effects of base money on aggregate demand: theory and evidence,"
Journal of Monetary Economics,
Elsevier, vol. 49(4), pages 687-708, May.
- Nelson, Edward, 2001. "Direct Effects of Base Money on Aggregate Demand: Theory and Evidence," CEPR Discussion Papers 2666, C.E.P.R. Discussion Papers.
- Edward Nelson, 2000. "Direct effects of base money on aggregate demand: theory and evidence," Bank of England working papers 122, Bank of England.
- Bennett T. McCallum & Edward Nelson, 1997.
"An Optimizing IS-LM Specification for Monetary Policy and Business Cycle Analysis,"
NBER Working Papers
5875, National Bureau of Economic Research, Inc.
- McCallum, Bennett T & Nelson, Edward, 1999. "An Optimizing IS-LM Specification for Monetary Policy and Business Cycle Analysis," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 31(3), pages 296-316, August.
- Bennett T. McCallum & Edward Nelson, . "An Optimizing IS-LM Specification for Monetary Policy and Business Cycle Analysis," GSIA Working Papers 1997-71, Carnegie Mellon University, Tepper School of Business.
- Fuhrer, Jeffrey C & Moore, George R, 1995. "Monetary Policy Trade-offs and the Correlation between Nominal Interest Rates and Real Output," American Economic Review, American Economic Association, vol. 85(1), pages 219-39, March.
- Dimitrios P. Tsomocos & Martin Shubik, 2002.
"A strategic market game with seigniorage costs of Fiat money,"
Springer, vol. 19(1), pages 187-201.
- Martin Shubik & D.P. Tsomocos, 1993. "A Strategic Market Game with Seigniorage Costs of Fiat Money," Cowles Foundation Discussion Papers 1043, Cowles Foundation for Research in Economics, Yale University.
- Koenig, Evan F, 1990.
"Real Money Balances and the Timing of Consumption: An Empirical Investigation,"
The Quarterly Journal of Economics,
MIT Press, vol. 105(2), pages 399-425, May.
- Evan F. Koenig, 1989. "Real money balances and the timing of consumption: an empirical investigation," Research Paper 8906, Federal Reserve Bank of Dallas.
- Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867-1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1, May.
- Monnet, Cyril, 2002. "Optimal public money," Working Paper Series 0159, European Central Bank.
- Brunner, Karl & Meltzer, Allan H, 1971. "The Uses of Money: Money in the Theory of an Exchange Economy," American Economic Review, American Economic Association, vol. 61(5), pages 784-805, December.
- Alchian, Armen A, 1977. "Why Money?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 9(1), pages 133-40, February.
- Krueger, Malte, 2008.
"Money: A Market Microstructure Approach,"
18416, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Publications Team).
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.