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Substitution des monnaies et cours légal

Author

Listed:
  • Sébastien Lotz
  • Guillaume Rocheteau

Abstract

This article addresses the difficulty introducing a new currency into a domestic economy. The aim is to study how a government can influence private agents in their decision to accept, or reject a new fiat currency. Different historical examples teach us that some conditions must be fulfilled for this type of monetary reform to be successful. In order to illustrate and confirm these results, we extend the search theoretical model of Kiyotaki and Wright [1993] by introducing two types of currency. We show that the legal or "illegal" tender of the old currency, and the quantity in the economy play an important role in the success of launching the new currency. We ultimately present simulations of the dynamics of the model. Classification JEL : E00, D83, E52

Suggested Citation

  • Sébastien Lotz & Guillaume Rocheteau, 2001. "Substitution des monnaies et cours légal," Revue d'économie politique, Dalloz, vol. 111(3), pages 459-480.
    • Handle: RePEc:cai:repdal:redp_113_0459
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    More about this item

    Keywords

    currency; legal tender;

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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