An Idealized View of Financial Intermediation

Artikel

We consider an environment where the general equilibrium assumption that every agent buys and sells simultaneously is relaxed. We show that fiat money can implement a Pareto optimal allocation only if taxes are type-specific. We then consider intermediated money by assuming that financial intermediaries whose liabilities circulate as money have an important identifying characteristic: they are widely viewed as default-free. The paper demonstrates that default-free intermediaries who issue deposit accounts with credit lines to consumers can resolve the monetary problem and make it possible for the economy to reach a Pareto optimum.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Economics: The Open-Access, Open-Assessment E-Journal ; ISSN: 1864-6042 ; Volume: 1 ; Year: 2007 ; Issue: 2007-5 ; Pages: 1-29 ; Kiel: Kiel Institute for the World Economy (IfW)

Classification and Topics

• Classification: Wirtschaft
• Subject: Fiat Money ; Cash-in-advance ; Financial Intermediation ; Finanzintermediär ; Papierwährung ; Cash-in-Advance-Modell ; Allgemeines Gleichgewicht ; Geldtheorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Sissoko, Carolyn
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW)
• (where): Kiel
• (when): 2007

Further information

• DOI: doi:10.5018/economics-ejournal.ja.2007-5
• Handle: http://hdl.handle.net/10419/18003
• Last update: 10.03.2025, 11:41 AM CET