Mengerian Saleableness and Commodity Money in a Walrasian Trading Post Example

Ross M. Starr

University of California at San Diego, Economics Working Paper Series from Department of Economics, UC San Diego

Abstract: In an economy with commodity-pairwise trading posts and transaction costs, commodity money is endogenously determined in general equilibrium. Absent double coincidence of wants, the low-transaction cost commodity (with the narrowest proportional bid/ask price spread) becomes the common medium of exchange.

Keywords: trading post; transaction cost; commodity money; bid/ask spread; medium of exchange (search for similar items in EconPapers)
Date: 2008-01-01
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Citations: View citations in EconPapers (5)

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