A Monetary Theory of Value Based on Transaction Costs

Lloyd Paquin

Working Paper from Economics Department, Queen's University

Abstract: This paper partially implements Hicks' suggestion -- that we modify the theory value to take account of transaction costs and uncertainty-- in a simple intergenerational model with transactions costs. Transaction cost are modelled in transforming sold goods (bonds or consumption goods) into bought goods. We prove the existence of a temporary equilibrium with bankruptcy, where households are storing part of their wealth in the form of money.

Pages: 51
Date: 1976
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Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:255

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