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Money and payments: a modern perspective

  • Holthausen, Cornelia
  • Monnet, Cyril

The role of money in society has been a controversial topic in economic theory over many years. Particular attention has been devoted to the analysis whether there should be competition in the supply of money, or whether this is best left to a governmental agency. This paper reviews the theoretical literature on these issues. It also gives an overview over some episodes of free banking where banks could issue currency themselves. Finally, we highlight several aspects in which today we have competition between issuers of money, namely in the international context, with electronic money, and in large value payments systems. JEL Classification: E40, E41, N10

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Paper provided by European Central Bank in its series Working Paper Series with number 0245.

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Date of creation: Jul 2003
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Handle: RePEc:ecb:ecbwps:20030245
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  1. Ricardo Cavalcanti & Andres Erosa & Ted Temzelides, 1997. "Private money and reserve management in a random matching model," Working Papers 97-24, Federal Reserve Bank of Philadelphia.
  2. Panzar, John C., 1989. "Technological determinants of firm and industry structure," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 1, pages 3-59 Elsevier.
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  9. Monnet, Cyril, 2002. "Optimal public money," Working Paper Series 0159, European Central Bank.
  10. Stacey L. Schreft, 1997. "Looking forward : the role for government in regulating electronic cash," Economic Review, Federal Reserve Bank of Kansas City, issue Q IV, pages 59-84.
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  30. Kahn, Charles M. & Roberds, William, 2007. "Transferability, finality, and debt settlement," Journal of Monetary Economics, Elsevier, vol. 54(4), pages 955-978, May.
  31. Zhou, Ruilin, 1997. "Currency Exchange in a Random Search Model," Review of Economic Studies, Wiley Blackwell, vol. 64(2), pages 289-310, April.
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