Money and debt in the structure of payments

Edward Green

Quarterly Review, 1999, vol. 23, issue Spr, 13-29

Abstract: In Scott Freeman?s (1996) model, payment system arrangements based on intermediated debt that is settled with money achieve higher welfare than does direct money payment. In a simplified version of Freeman?s model, welfare can be further improved and efficiency achieved by a monetary authority participating in a secondary market for debt or by a private intermediary using a common clearinghouse device. The analysis clarifies that ordinary private agents can assume the role of central bank or clearinghouse; no artificial agent, posited solely to play that role and endowed with special capabilities for it, is necessary. The institutional features required for a central bank or a clearinghouse to achieve efficiency, particularly features related to central bank independence, are discussed informally.

Keywords: Payment; systems (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (12)

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Related works:
Journal Article: Money and Debt in the Structure of Payments (1997)
Working Paper: Money and Debt in the Structure of Payments (1996)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmqr:y:1999:i:spr:p:13-29:n:v.23no.2

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