IDEAS home Printed from
   My bibliography  Save this article

Fiat Money and Coordination: A "Perverse" Coexistence of Private Notes and Fiat Money


  • John Bryant


This paper attempts to combine important insights on matching models of money with insights from the macroeconomic coordination game-technological complementarity literature. One important old insight, but which has been refined lately, is that money is imperfect information. Further, one simple specification of incomplete information in particular, which has proven fruitful in motivating outside fiat money in matching environments, is to assume that agents are unidentifiable. This paper adopts this approach. In earlier work, it has also been argued that outside money has a direct role to play in production coordination itself. On the other hand, this paper considers another, and very different, possible aspect of the relationship between outside money and production coordination, in a matching model of incomplete information. Outside fiat money can actually have its very demand induced by the anticipation and realization of a production coordination failure that, in self-fulfilling fashion, its own existence facilitates. Moreover, this perverse demand for outside fiat money coexists with private notes.

Suggested Citation

  • John Bryant, 2005. "Fiat Money and Coordination: A "Perverse" Coexistence of Private Notes and Fiat Money," Eastern Economic Journal, Eastern Economic Association, vol. 31(3), pages 377-381, Summer.
  • Handle: RePEc:eej:eeconj:v:31:y:2005:i:3:p:377-381

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Bryant, John, 2002. "Trade, credit and systemic fragility," Journal of Banking & Finance, Elsevier, vol. 26(2-3), pages 475-489, March.
    2. Russell W. Cooper & Dean Corbae, 2001. "Financial collapse and active monetary policy: a lesson from the Great Depression," Staff Report 289, Federal Reserve Bank of Minneapolis.
    3. 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.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eej:eeconj:v:31:y:2005:i:3:p:377-381. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson, College of the Holy Cross). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.