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Money and payments: a modern perspective

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Author Info
Cornelia Holthausen () (European Central Bank, Postfach 160319, 60311 Frankfurt am Main, Germany.)
Cyril Monnet () (European Central Bank, Postfach 160319, 60311 Frankfurt am Main, Germany.)
Abstract

The role of money in society has been a controversial topic in economic theory over many years. Particular attention has been devoted to the analysis whether there should be competition in the supply of money, or whether this is best left to a governmental agency. This paper reviews the theoretical literature on these issues. It also gives an overview over some episodes of free banking where banks could issue currency themselves. Finally, we highlight several aspects in which today we have competition between issuers of money, namely in the international context, with electronic money, and in large value payments systems. JEL Classification: E40; E41; N10.

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Paper provided by European Central Bank in its series Working Paper Series with number 245.

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Length: 56 pages
Date of creation: Jul 2003
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Handle: RePEc:ecb:ecbwps:20030245

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Related research
Keywords: Money; private money; free banking; electronic money; payment systems.;

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References listed on IDEAS
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.:
  1. Zhou, Ruilin, 1997. "Currency Exchange in a Random Search Model," Review of Economic Studies, Blackwell Publishing, vol. 64(2), pages 289-310, April. [Downloadable!] (restricted)
  2. Barro, Robert J. & Gordon, David B., 1983. "Rules, discretion and reputation in a model of monetary policy," Journal of Monetary Economics, Elsevier, vol. 12(1), pages 101-121. [Downloadable!] (restricted)
    Other versions:
  3. Krugman, Paul, 1980. "Vehicle Currencies and the Structure of International Exchange," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 12(3), pages 513-26, August. [Downloadable!] (restricted)
    Other versions:
  4. Gorton, Gary, 1999. "Pricing free bank notes," Journal of Monetary Economics, Elsevier, vol. 44(1), pages 33-64, August. [Downloadable!] (restricted)
  5. Kroszner, Randall, 1995. "Free banking : the Scottish experience as a model for emerging economies," Policy Research Working Paper Series 1536, The World Bank. [Downloadable!]
  6. Nobuhiro Kiyotaki & John Moore, 2004. "Inside Money and Liquidity," ESE Discussion Papers 115, Edinburgh School of Economics, University of Edinburgh.
  7. Ian Giddy & Anthony Saunders & Ingo Walter, 1996. "Alternative models for clearance and settlement: the case of the single European capital market," Proceedings, Board of Governors of the Federal Reserve System (U.S.), pages 986-1003.
  8. Azariadis, Costas & Bullard, James & Smith, Bruce D., 2001. "Private and Public Circulating Liabilities," Journal of Economic Theory, Elsevier, vol. 99(1-2), pages 59-116, July. [Downloadable!] (restricted)
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  9. Freeman, Scott, 1996. "The Payments System, Liquidity, and Rediscounting," American Economic Review, American Economic Association, vol. 86(5), pages 1126-38, December. [Downloadable!] (restricted)
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  11. Cyril Monnet, 2002. "Optimal public money," Working Paper Series 159, European Central Bank. [Downloadable!]
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  13. Antoine Martin & Stacey L. Schreft, 2003. "Currency competition : a partial vindication of Hayek," Research Working Paper RWP 03-04, Federal Reserve Bank of Kansas City. [Downloadable!]
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  14. Kiyotaki, Nobuhiro & Wright, Randall, 1991. "A contribution to the pure theory of money," Journal of Economic Theory, Elsevier, vol. 53(2), pages 215-235, April. [Downloadable!] (restricted)
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  15. Kocherlakota, Narayana R., 1998. "Money Is Memory," Journal of Economic Theory, Elsevier, vol. 81(2), pages 232-251, August. [Downloadable!] (restricted)
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  16. Woodford, Michael, 2000. "Monetary Policy in a World without Money," International Finance, Blackwell Publishing, vol. 3(2), pages 229-60, July. [Downloadable!] (restricted)
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  17. Klein, Benjamin, 1974. "The Competitive Supply of Money," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 6(4), pages 423-53, November. [Downloadable!] (restricted)
  18. Jones, Robert A, 1976. "The Origin and Development of Media of Exchange," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 757-75, August. [Downloadable!] (restricted)
  19. Mervyn King, 1999. "Challenges for monetary policy : new and old," Proceedings, Federal Reserve Bank of Kansas City, pages 11-57. [Downloadable!]
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  21. Arthur J. Rolnick & Bruce D. Smith & Warren E. Weber, 1998. "Lessons from a laissez-faire payments system: the Suffolk Banking System (1825-58)," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Sum, pages 11-21. [Downloadable!]
    Other versions:
  22. Giddy, Ian & Saunders, Anthony & Walter, Ingo, 1996. "Alternative Models for Clearance and Settlement: The Case of the Single European Capital Market," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(4), pages 986-1000, November. [Downloadable!] (restricted)
  23. 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. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. C. Sardoni, 2006. "Why Central Banks (and Money) ÒRule the RoostÓ," Economics Working Paper Archive wp_457, Levy Economics Institute, The. [Downloadable!]
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