A Walrasian theory of commodity money: Paradoxical results
AbstractThe objective of this note is to analyze some implications of the model of commodity money described in Banerjee and Maskin (1996) which may seem paradoxical. In order to do this, we incorporate a general production cost structure into the model. We focus on two different results. First, the existence of technologies that make counterfeiting a commodity more difficult may exclude it from being used as medium of exchange. Second, allocative distortions due to problems of asymmetric information may become larger in the presence of such technologies.
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Bibliographic InfoPaper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 480.
Date of creation: Jun 2000
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Web page: http://www.econ.upf.edu/
Other versions of this item:
- Cuadras-Morato, Xavier, 2000. "A Walrasian Theory of Commodity Money: Paradoxical Results," Bulletin of Economic Research, Wiley Blackwell, vol. 52(3), pages 207-14, July.
- D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2000-07-03 (All new papers)
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- Giuseppe Mastromatteo & Luigi Ventura, 2007. "The origin of money: A survey of the contemporary literature," International Review of Economics, Springer, vol. 54(2), pages 195-224, June.
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