A Strategic Market Game with Seigniorage Costs of Fiat Money
Martin Shubik and
No 1043, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University
A model that includes the cost of producing money is presented and the nature of the inefficient equilibria in the model are examined. It is suggested that if one acknowledges that transactions are a form of production, which requires the consumption resources, then the concept of Pareto optimality is inappropriate for assessing efficiency. Instead it becomes necessary to provide an appropriate comparative analysis of alternative transactions mechanisms in the appropriate context.
Keywords: Strategic market games; Seigniorage costs; Inefficiency (search for similar items in EconPapers)
JEL-codes: D51 E51 (search for similar items in EconPapers)
Note: CFP 1033.
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Published in Economic Theory (2002), 19(1): 187-201
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