EconPapers    
Economics at your fingertips  
 

Indivisibility and Non-Neutrality of Money

Manjong Lee

Korean Economic Review, 2007, vol. 23, 223-242

Abstract: In this paper, we study the real effects of different degrees of divisibility of money in a random matching model. When money is very indivisible, as it is seemingly true in most of the world before the 19th century, welfare increases as the divisibility of money increases (non-neutrality). However, when the degree of divisibility is sufficiently high, as it is seemingly true for the current U.S. coinage system, there would be little or no welfare loss from reducing the degree of divisibility, the elimination of the penny.

Keywords: money; indivisibility; non-neutrality; matching model (search for similar items in EconPapers)
JEL-codes: E40 E51 (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://keapaper.kea.ne.kr/RePEc/kea/keappr/KER-200712-23-2-01.pdf (application/pdf)

Related works:
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:kea:keappr:ker-200712-23-2-01

Access Statistics for this article

Korean Economic Review is currently edited by Kyung Hwan Baik

More articles in Korean Economic Review from Korean Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by KEA ().

 
Page updated 2025-03-19
Handle: RePEc:kea:keappr:ker-200712-23-2-01