Inside-Outside Money Competition

Ramon Marimon, Pedro Teles and Juan Pablo Nicolini

No 4039, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study how competition from privately-supplied currency substitutes affects monetary equilibria. Whenever currency is inefficiently provided, inside money competition plays a disciplinary role by providing an upper bound on equilibrium inflation rates. Furthermore, if ?inside monies? can be produced at a sufficiently low cost, outside money is driven out of circulation. Whenever a ?benevolent? government can commit to its fiscal policy, sequential monetary policy is efficient and inside money competition plays no role.

Keywords: Electronic money; Inside money; Currency competition; Reputation; inflation (search for similar items in EconPapers)
JEL-codes: E40 E50 E58 E60 (search for similar items in EconPapers)
Date: 2003-09
New Economics Papers: this item is included in nep-dge, nep-ifn, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
https://cepr.org/publications/DP4039 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Inside-outside money competition (2003)
Working Paper: Inside-outside money competition (2003)
Working Paper: Inside Outside Money Competition (2001)
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: https://EconPapers.repec.org/RePEc:cpr:ceprdp:4039

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP4039

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().