An Idealized View of Financial Intermediation

Abstract: 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

• Location: Deutsche Nationalbibliothek Frankfurt am Main
• Extent: Online-Ressource
• Language: Englisch

References and Relationships

• Bibliographic citation: An Idealized View of Financial Intermediation ; volume:1 ; number:1 ; year:2007 ; extent:29 ; Economics / Journal articles. Journal articles ; 1, Heft 1 (2007) (gesamt 29)

Contributors, Places and Time

• Creator: Sissoko, Carolyn

Further information

• DOI: 10.5018/economics-ejournal.ja.2007-5
• URN: urn:nbn:de:101:1-2412121806059.329184960775
• Rights: Open Access; Der Zugriff auf das Objekt ist unbeschränkt möglich.
• Last update: 15.08.2025, 7:35 AM CEST