The reeded edge and the Phillips curve: money neutrality, common knowledge, and subjective beliefs
Article Abstract:
A simple two-person auction model was presented with a seller and a buyer bidding in terms of money where the value of the money is uncertain. The study yielded several results. First, nominal effects will be experienced if a monetary revaluation is common knowledge. Second, making the value of money common knowledge optimizes total gains from trade if seller and buyer have identical beliefs. Third, monetary revaluations have no net effect if both seller and buyer are equally well-informed and have identical beliefs.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1999
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The transition from barter to fiat money
Article Abstract:
The transition from barter to fiat money is accounted through an equilibrium path. This is done through the intervention of a self-interested government which can credibly promise to limit the issuance of money. The government has to offset the benefits of seigniorage to gain credibility. This is done by internalizing the macroeconomic externalities due to the issuance of fiat money. The transition can be successful depending on the government's patience and involvement in the economy.
Publication Name: American Economic Review
Subject: Economics
ISSN: 0002-8282
Year: 1995
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A model of fiat money and barter
Article Abstract:
Fiat money has more value than barter as payment for trades because of barter's dependency on double coincidence of wants. Fiat money, when used in a trade environment wherein revenues cannot be used for simultaneous purchases in different markets, becomes significant only in cash-in-advance situations. While both payment modes can con-exist, the choice of optimal payment possibilities and exchange patterns significantly widen when goods are uniformly desired.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1996
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