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On the Origins and Evolving Role of Money

Author

Listed:
  • Jean-Paul Chavas
  • Daniel W. Bromley

Abstract

This paper explores the origins and evolving role of money. It stresses the role of money in solving coordination problems. This role is present with or without exchange. A historical overview of money stresses the evolutionary aspects of monetary institutions. The analysis develops a general evaluation of economic efficiency under transaction costs and imperfect information, and in the presence of public goods and externalities. It identities a nonneutral role for money. It argues that the efficiency gains from exchange are only part of the benefits of a monetary economy.

Suggested Citation

  • Jean-Paul Chavas & Daniel W. Bromley, 2008. "On the Origins and Evolving Role of Money," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 164(4), pages 624-651, December.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200812)164:4_624:otoaer_2.0.tx_2-l
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    References listed on IDEAS

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    1. Hart, Oliver & Moore, John, 1990. "Property Rights and the Nature of the Firm," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1119-1158, December.
    2. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    3. Pedro Cavalcanti Ferreira & JosÈ Luiz Rossi, 2003. "New Evidence from Brazil on Trade Liberalization and Productivity Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(4), pages 1383-1405, November.
    4. Peter Howitt, 2005. "Beyond Search: Fiat Money In Organized Exchange," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(2), pages 405-429, May.
    5. Hayashi, Fumio & Matsui, Akihiko, 1996. "A Model of Fiat Money and Barter," Journal of Economic Theory, Elsevier, vol. 68(1), pages 111-132, January.
    6. Jean-Marc Tallon & Jean-Michel Courtault, 2000. "Allais' trading process and the dynamic evolution of a market economy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 16(2), pages 477-481.
    7. Guesnerie, Roger, 1975. "Pareto Optimality in Non-Convex Economies," Econometrica, Econometric Society, vol. 43(1), pages 1-29, January.
    8. Foley, Duncan K., 1970. "Economic equilibrium with costly marketing," Journal of Economic Theory, Elsevier, vol. 2(3), pages 276-291, September.
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    Cited by:

    1. Herrmann-Pillath Carsten, 2014. "Naturalizing Institutions: Evolutionary Principles and Application on the Case of Money," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 234(2-3), pages 388-421, April.

    More about this item

    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • G2 - Financial Economics - - Financial Institutions and Services
    • N2 - Economic History - - Financial Markets and Institutions

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