Optimal Denominations for Coins and Bank Notes: In Defense of the Principle of Least Effort
Posted: 16 May 2002
Abstract
A number of recent articles argue that the 'problem of Bachet' - the problem of finding the most efficient set of weights - can shed light on the problem of finding the optimal denominational structure of a series of coins and bank notes. This note argues that the two problems differ in nature, and that the principle of least effort is the more relevant criterion.
Keywords: banknotes, denominations, central banks
JEL Classification: E42
Suggested Citation: Suggested Citation
Van Hove, Leo, Optimal Denominations for Coins and Bank Notes: In Defense of the Principle of Least Effort. Available at SSRN: https://ssrn.com/abstract=291012
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