The Jevons double coincidence condition and local uniqueness of money: An example
Jevons's double coincidence of wants condition is derived as the result of household level transaction costs in general equilibrium where N commodities are traded at (1/2)N(N-1) commodity-pairwise trading posts. Each household experiences a set-up cost on entering an additional trading post. Budget constraints are enforced at each trading post separately implying demand for a carrier of value between trading posts, commodity money. General equilibrium consists of prices so that each trading post clears. Existence and local uniqueness of commodity money in equilibrium can follow from the scale economy implied by the household set-up cost.
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- Kiyotaki, Nobuhiro & Wright, Randall, 1989. "On Money as a Medium of Exchange," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 927-54, August.
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- Starr, Ross M., 2008. "Mengerian saleableness and commodity money in a Walrasian trading post example," Economics Letters, Elsevier, vol. 100(1), pages 35-38, July.
- Starr, Ross M., 2008. "Mengerian Saleableness and Commodity Money in a Walrasian Trading Post Example," University of California at San Diego, Economics Working Paper Series qt92k1n9mn, Department of Economics, UC San Diego.
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