A Model for Optimal Currency Distribution in Iran (in Persian)

Ahmad Assadzadeh, Mehdi Khandan and Majid Ajalli ()
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Ahmad Assadzadeh: Iran
Mehdi Khandan: Iran
Majid Ajalli: Iran

Journal of Monetary and Banking Research (فصلنامه پژوهش‌های پولی-بانکی), 2016, vol. 8, issue 26, 499-520

Abstract: Despite the explosive growth of electronic payment systems, banknotes and coins still play an important role in retail payments. Optimal combination of currency has significant impact on cash payment system efficiency and reduces costs of production and distribution of currency. This paper aims to optimize the ratio of each denomination in the combination of banknotes and coins. To achieve this objective, the allocation of banknotes and coins in retail prices of goods and services consumed by households is used inspired by the greedy algorithm in MATLAB software environment. The results show that economy needs more low value currencies. In order to economic performance and to prevent losses a model for optimal distribution, larger note and new denominations issuance have been proposed.

JEL-codes: E43 E58 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:mbr:jmbres:v:8:y:2016:i:26:p:499-520

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