Modeling Small Change: A Review Article
AbstractIn The Big Problem of Small Change, Sargent and Velde apply a cash-in-advance model to the history of coinage and to contemporary thought about coinage. They assert that their model accounts for puzzling observations involving the depreciation and disappearance of small coins. I question its usefulness for that purpose and for other issues pertaining to coinage. My main concern is that their model does not depict the problems usually associated with full-bodied coinage systems-problems that stem from the technological difficulties of having a full-bodied coinage system in which money is portable, divisible, durable, and recognizable.
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Bibliographic InfoPaper provided by Pennsylvania State University, Department of Economics in its series Working Papers with number 9-03-3.
Date of creation: Jan 2003
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Find related papers by JEL classification:
- E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
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