Fiat Money and Quality Uncertainty
Bibliographic Data
| ID | 9726645 |
|---|---|
| Authors | Urs Haegler (London School of Economics and Political Science, corresponding author) |
| Year | 1997 |
| Volume | 64 |
| Issue | 256 |
| Pages | 547-565 |
| Publication date | 1997-11-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Economica (JOURNAL) |
| Journal identifiers | ISSN: 0013-0427 • E-ISSN: 1468-0335 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/1468-0335.00099 |
| OpenAlex | W2101182560 |
| Language | EN |
| References cited | 4 |
The paper studies the role of money as a medium of exchange when barter trade is restricted not only by the double‐coincidence‐of‐wants requirement but also by private information about the quality of commodities. For this purpose, the model of Kiyotaki and Wright (1989) is extended to include commodities of both high and low quality. It is shown that, despite being intrinsically useless, fiat money may have value in trade because it is of uniform quality. Moreover, the introduction of a sufficiently small amount of fiat money proves to be welfare‐increasing
Barter · Currency · Economics · Fiat money · Macroeconomics · Market economy · Medium of exchange · Microeconomics · Monetary economics · Monetary policy · Production (economics) · Quality (philosophy) · Store of value · Value (mathematics) · Welfare · Wright · Computer Science · Economic theories and models · Economic Theory and Institutions · Economic Theory and Policy
| Highly cited | No |
|---|