Imperfect monitoring is necessary for essentiality of money

Hiroki Fukai ()
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Hiroki Fukai: Kyushu University

Economic Theory Bulletin, 2019, vol. 7, issue 1, No 2, 19-26

Abstract: Abstract Fiat money, an intrinsically useless object, is said to be essential if some good allocations are achieved with it but not without it. In this paper, it is shown that imperfect monitoring is necessary for money to be essential in a large class of economic environments. This provides a guide for the construction of models in which monetary trade achieves good outcomes.

Keywords: Money; Imperfect monitoring; Essentiality of money (search for similar items in EconPapers)
JEL-codes: C73 D82 E40 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s40505-018-0140-0

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