More on money as a medium of exchange

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On Money as a Medium of Exchange

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The Emergence of Commodity Money as a Medium of Exchange

This paper examines the endogenous emergence of a commodity money in a trading post economy. The commodity money is defined as the common medium of exchange and is determined by the equilibrium pattern of exchange. The long run equilibria are analyzed using an evolutionary style model. Agents follow a simple adaptive process, generating dynamics that are reduced to a Markov process. Examples ar...

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Private Money as a Competing Medium of Exchange

By introducing costly centralized exchange into a traditional search theoretic decentralized market, where money can mediate trade, we show private money can arise endogenously because it is pro…table for the centralized intermediary to satisfy the demand for money that will naturally arise. Trading money to another agent for a good, rather than trading good for good through the centralized int...

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Fiat Money as a Medium of Exchange: Experimental Evidence

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Self-fulfilling traps with money as a medium of exchange

A model of an economy with random matching and monetary exchanges is shown to have two equilibrium regimes. In the first, agents find an opportunity for a sale in each period and there is full-employment. In the second, agents attempt to increase their balances because of a lack of opportunities for sales which is in turn induced by the saving for higher money balances, and there is unemploymen...

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ژورنال

عنوان ژورنال: Economic Theory

سال: 1993

ISSN: 0938-2259,1432-0479

DOI: 10.1007/bf01212919