Time-Consistent Private Supply of Outside Paper Money
نویسندگان
چکیده
منابع مشابه
Private Supply of Fiat Money
The question of whether private money is viable in the absence of any external control is an old one. We address it in an economy with decentralized trade and information where a self-interested agent, the bank, has the monopoly over the provision of fiat money and is not limited on how much it can issue over time. The assumption of decentralized information is a crucial one and sets this work ...
متن کاملWorking Paper No. 15-19 Private Money and Banking Regulation
We show that a competitive banking system is inconsistent with an optimum quantity of private money. Because bankers cannot commit to their promises and the composition of their assets is not publicly observable, a positive franchise value is required to induce the full convertibility of bank liabilities. Under perfect competition, a positive franchise value can be obtained only if the return o...
متن کاملPrivate Money
A random matching environment is constructed where banks mitigate a mismatch between the timing of investment payo¤s and when agents wish to consume. Claims on banks may serve as media of exchange, i.e. private money. Two problems can emerge with private money. First, there may exist welfaredominated equilibria where banks hold low-return assets. Second, private media of exchange may be subject...
متن کاملPrivate Money and Counterfeiting
P erhaps the most fundamental question in monetary economics pertains to the role of the government in providing money. A widely held view among economists is that the supply of media of exchange is an activity that should not be left to the private sector. Indeed, even Milton Friedman, who in most respects has viewed the economic role of the government quite narrowly, argues in Friedman (1960)...
متن کاملEndogenous supply of fiat money
We consider whether reputation concerns can discipline the behavior of a long-lived selfinterested agent who has a monopoly over the provision of fiat money. We obtain that when this agent can commit to a choice of money supply, there is a monetary equilibrium where it never overissues. We show, however, that such equilibria do not exist when there is no commitment. This happens because the inc...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2003
ISSN: 1556-5068
DOI: 10.2139/ssrn.420162