Janet Hua, Jiang and Mei, Dong (2008): One or Two Monies?
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We investigate whether money constitutes a perfect substitute for the missing record-keeping technology in a quasi-linear environment, where private information and limited commitment are present. We adopt the mechanism design approach and solve a social planner�s problem subject to the resource constraint, the incentive constraints imposed by the existing frictions, and the available memory technologies. The result is that when money is divisible, concealable and in variable supply, a single money may or may not be su¢ cient to replace the record-keeping technology. We further show that two monies serve as a perfect substitute for the record-keeping technology so that there is no need for a third money.
|Item Type:||MPRA Paper|
|Original Title:||One or Two Monies?|
|Keywords:||Record-keeping, Money, Private Information, Limited Commit- ment, Mechanism Design|
|Subjects:||F - International Economics > F3 - International Finance > F30 - General
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information; Mechanism Design
E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E40 - General
|Depositing User:||Janet Hua Jiang|
|Date Deposited:||26. Apr 2009 15:55|
|Last Modified:||20. Feb 2013 13:43|
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