The Appearance of Carriers and the Origins of Money
AbstractThe purpose of this essay is to analyze the circumstances where a monetary economy dominates over a redistributive barter economy in which there is not an absence of double coincidence of wants problem. For this purpose, we develop a spatial general equilibrium model where individuals must trade with intermediaries to acquire the consumption goods that they need; exchange is costly, there is no trust, and individuals act in their own interest to maximize their utilities. The model is also used to address a number of issues in monetary economics like explaining the historical emergence of commodity-money, valued fiat money, the welfare-enhancing role of money, equilibria with several mediums of exchange, and split between the utility and the medium of exchange value of the good that serves as a medium of exchange. It also provides some interesting links between the monetary and urban economics literatures.
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Bibliographic InfoPaper provided by The Center for Economic Research and Graduate Education - Economic Institute, Prague in its series CERGE-EI Working Papers with number wp169.
Date of creation: Jan 2001
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barter; medium of exchange; city size; carrier; merchant; transaction cost;
Other versions of this item:
- Jose Noguera S., 2001. "The Appearance of Carriers and the Origins of Money," Macroeconomics 0012014, EconWPA.
- E00 - Macroeconomics and Monetary Economics - - General - - - General
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
- N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
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