Creator: Kiyotaki, Nobuhiro. and Wright, Randall. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Dept.) Number: 464 Abstract:
The classical and early neoclassical economists knew that the essential function of money was its role as a medium of exchange. Recently, this idea has been formalized using search-theoretic noncooperative equilibrium models of the exchange process. The goal of this paper is to use a simple model of this class to analyze four substantive issues in monetary economics: the interaction between specialization and exchange, dual fiat currency regimes, the welfare improving role of money, and the susceptibility of monetary economies to extrinsic uncertainty.
Keyword: Money, Fiat currency, Exchange, Monetary economics, and Fiat money Subject (JEL): E00 - Macroeconomics and monetary economics - General - General and D83 - Information, knowledge, and uncertainty - Search ; Learning ; Information and knowledge ; Communication ; Belief