Money and Loans

Dan Bernhardt ()

Working Papers from Queen's University, Department of Economics

Abstract: The conditions under which money is essential to support a Pareto optimum, those where loan mechanisms suffice, and those such that both are essential is examined. In the absence of a coincidence of wants, loans and/or money are necessary to facilitate exchange. In a large economy with a limited communication technology, the expected consequences to reneging are insufficient for the repayment of the utility maximizing level of loans to be time consistent. In contrast, redeemability of money is not associated with a particular agent so money has no time consistency problems. Consequently, in large economies money is essential. If, additionally, individual Clower constraints bind, loans and money are both essential.

Date: 1985

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Money and Loans (1989)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:qed:wpaper:643

Access Statistics for this paper

More papers in Working Papers from Queen's University, Department of Economics
Contact information at EDIRC.
Series data maintained by Mark Babcock ().