Technological role of fiat money
This article argues that fiat money’s only technological role in an economy is to act as societal memory: money allows people to credibly record some aspects of their transactions and make that record accessible to other people. This record-keeping role is demonstrated in the three standard paradigms of fiat money: the overlapping generations, turnpike, and search models. In these models, if a new economy is created by removing the money and replacing it only with a historical record of all transactions, known to everyone in the economy, then the original monetary allocation is still achievable as an equilibrium. ; This article is a less technical presentation of the ideas in the author’s study, “Money is Memory,” which is forthcoming in the Journal of Economic Theory. The article appears in the Minneapolis Fed’s Quarterly Review with the permission of Academic Press.
Volume (Year): (1998)
Issue (Month): Sum ()
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Townsend, Robert M, 1989. "Currency and Credit in a Private Information Economy," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1323-44, December.
- Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66, pages 467.
- Kiyotaki, Nobuhiro & Wright, Randall, 1991.
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Elsevier, vol. 53(2), pages 215-235, April.
- S. Rao Aiyagari & Neil Wallace, 1991.
"Existence of Steady States with Positive Consumption in the Kiyotaki-Wright Model,"
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Oxford University Press, vol. 58(5), pages 901-916.
- S. Rao Aiyagari & Neil Wallace, 1991. "Existence of steady states with positive consumption in the Kiyotaki-Wright model," Working Papers 428, Federal Reserve Bank of Minneapolis.
- Joseph M. Ostroy, 1972.
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UCLA Economics Working Papers
021, UCLA Department of Economics.
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