IDEAS home Printed from https://ideas.repec.org/a/mcb/jmoncb/v34y2002i3p563-88.html
   My bibliography  Save this article

On the Launching of a New Currency

Author

Listed:
  • Lotz, Sebastien
  • Rocheteau, Guillaume

Abstract

This paper studies the appropriate way of launching a new fiat currency within a dual currency search-theoretic framework. We demonstrate that legal tender laws may not be sufficient to guarantee the acceptability of the new currency, and that the old currency may continue to circulate if the enforcement power of legal tender laws is weak, and the fraction of individuals endowed with the new currency is too low. The possibility of converting the old currency into the new one can ease the transition to the new currency only if it is combined with strict legal tender laws. Finally, a network externality may generate inefficiencies in the decision to switch to the new currency.

Suggested Citation

  • Lotz, Sebastien & Rocheteau, Guillaume, 2002. "On the Launching of a New Currency," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 34(3), pages 563-588, August.
  • Handle: RePEc:mcb:jmoncb:v:34:y:2002:i:3:p:563-88
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Otrachshenko, Vladimir & Popova, Olga & Tavares, José, 2016. "Psychological Costs of Currency Transition: Evidence from Euro Adoption," CEPR Discussion Papers 11071, C.E.P.R. Discussion Papers.
    2. Columba, Francesco, 2008. "The speed of euro adoption," Journal of International Money and Finance, Elsevier, vol. 27(2), pages 249-259, March.
    3. Dror Goldberg, 2012. "The tax-foundation theory of fiat money," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 50(2), pages 489-497, June.
    4. Mileva, Elitza & Siegfried, Nikolaus, 2012. "Oil market structure, network effects and the choice of currency for oil invoicing," Energy Policy, Elsevier, vol. 44(C), pages 385-394.
    5. Lotz, Sebastien, 2004. "Introducing a new currency: Government policy and prices," European Economic Review, Elsevier, vol. 48(5), pages 959-982, October.
    6. Francesco Columba, 2007. "Speed of euro adoption," 2007 Meeting Papers 350, Society for Economic Dynamics.
    7. Joshua R. Hendrickson & Thomas L. Hogan & William J. Luther, 2016. "The Political Economy Of Bitcoin," Economic Inquiry, Western Economic Association International, vol. 54(2), pages 925-939, April.
    8. repec:eee:jeborg:v:141:y:2017:i:c:p:188-195 is not listed on IDEAS
    9. Mikael Stenkula, 2003. "Carl Menger and the network theory of money," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 10(4), pages 587-606.
    10. Otrachshenko, Vladimir & Popova, Olga & Tavares, José, 2016. "Psychological costs of currency transition: evidence from the euro adoption," European Journal of Political Economy, Elsevier, vol. 45(C), pages 89-100.
    11. Aleksander Berentsen & Guillaume Rocheteau, 2002. "Money in Bilateral Trade," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 138(IV), pages 489-506, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    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:mcb:jmoncb:v:34:y:2002:i:3:p:563-88. 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: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879 .

    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.

    We have no references for this item. You can help adding them by using 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.