A Walrasian Theory of Commodity Money: Paradoxical Results

UPF Economics & Business Working Paper No. 480

13 Pages Posted: 22 Nov 2000

See all articles by Xavier Cuadras Morató

Xavier Cuadras Morató

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Date Written: 2000

Abstract

The objective of this note is to analyze some implications of the model of commodity money described in Banerjee and Maskin (1996) which may seem paradoxical. In order to do this, we incorporate a general production cost structure into the model. We focus on two different results. First, the existence of technologies that make counterfeiting a commodity more difficult may exclude it from being used as medium of exchange. Second, allocative distortions due to problems of asymmetric information may become larger in the presence of such technologies.

Keywords: Money, lemons

JEL Classification: D50, D82, E40

Suggested Citation

Cuadras Morató, Xavier, A Walrasian Theory of Commodity Money: Paradoxical Results (2000). UPF Economics & Business Working Paper No. 480, Available at SSRN: https://ssrn.com/abstract=235672 or http://dx.doi.org/10.2139/ssrn.235672

Xavier Cuadras Morató (Contact Author)

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
(34) 93 542 26 06 (Phone)
(34) 93 542 17 46 (Fax)

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