Private money, settlement, and discount: a comment

Stacey Schreft

No RWP 00-01, Research Working Paper from Federal Reserve Bank of Kansas City

Abstract: Temzelides and Williamson present a model of private currency issuance to study the effect of clearing arrangements on the prices at which private currencies trade, on the volume of exchange, and on welfare. Their findings hinge on three factors: the location of the issuers relative to the area in which their currencies circulate, whether there is an arrangement for clearing nonlocally issued currencies, and whether agents are fully informed about the quality of the currencies. This paper finds that the Temzelides-Williamson model provides valuable insights about historical experiences with private paper monies, but it raises more questions than it answers regarding electronic currencies. The model can, however, serve as a useful point of departure for further research.

Keywords: Money (search for similar items in EconPapers)
Date: 2000
New Economics Papers: this item is included in nep-mon
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Journal Article: Private money, settlement, and discount A comment (2001)
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