One or two monies?

Mei Dong () and Janet Hua Jiang

Journal of Monetary Economics, 2010, vol. 57, issue 4, 439-450

Abstract: The set of incentive-feasible allocations is examined in a dynamic quasi-linear environment where agents lack commitment and have private information over their idiosyncratic characteristics. When record-keeping is available, the first-best allocation is implementable in a set of sufficiently patient economies. When record-keeping is limited to one money, this set is strictly smaller--except when private information is absent. When record-keeping is expanded, but limited to two monies, the set of economies for which the first-best is implementable corresponds to that of record-keeping, even when private information is present. We further demonstrate that two monies are a perfect substitute for record-keeping.

Keywords: Record-keeping; Money; Private; information; Limited; commitment; Mechanism; design (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (4)

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Working Paper: One or Two Monies? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:57:y:2010:i:4:p:439-450

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