A Walrasian theory of commodity money: Paradoxical results

Xavier Cuadras-Morató

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: The objective of this note is to analyze some implications of the model of commodity money described in Banerjee and Maskin (1996) which may seem paradoxical. In order to do this, we incorporate a general production cost structure into the model. We focus on two different results. First, the existence of technologies that make counterfeiting a commodity more difficult may exclude it from being used as medium of exchange. Second, allocative distortions due to problems of asymmetric information may become larger in the presence of such technologies.

Keywords: Money; lemons (search for similar items in EconPapers)
JEL-codes: D50 D82 E40 (search for similar items in EconPapers)
Date: 2000-06
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Citations: View citations in EconPapers (1)

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Journal Article: A Walrasian Theory of Commodity Money: Paradoxical Results (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:480

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