Monetary equilibrium with decentralized trade and learning

Arbeitspapier

This paper analyzes the stability of monetary regimes in an economy where fiat money is endogenously created by the government, information about its value is imperfect, and learning is decentralized. We show that monetary stability depends crucially on the speed of information transmission in the economy. Our model generates a dynamic on the acceptability of fiat money that resembles historical accounts of the rise and eventual collapse of overissued paper money. It also provides an explanation of the fact that, despite its obvious advantages, the widespread use of fiat money is only a recent development.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Research Report ; No. 2005-1

Classification and Topics

• Classification: Wirtschaft ; Estimation: General ; Semiparametric and Nonparametric Methods: General ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Single Equation Models; Single Variables: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
• Subject: dynamic discrete choice models ; finite mixture ; nonparametric identification ; panel data ; sieve estimator ; unobserved heterogeneity

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Araujo, Luis ; Camargo, Braz
• Event: Veröffentlichung
• (who): The University of Western Ontario, Department of Economics
• (where): London (Ontario)
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/70397
• Last update: 10.03.2025, 11:43 AM CET