Abstract
Previous studies that compare a uniform money with separate monies used models in which money is the only asset and in which individuals hold either zero or one unit of money. Here, the comparison is made using a model in which money coexists with a higher-return asset and in which individuals are permitted to hold richer portfolios of assets. The results show that a general conclusion is not possible. A uniform money has a higher expected utility than do separate monies in many examples. However, when the discount on bonds and uncertainty about the nationality of the trading partner are sufficiently high, then there are examples in which separate monies are better.
| Original language | English |
|---|---|
| Pages (from-to) | 21-42 |
| Number of pages | 22 |
| Journal | Open Economies Review |
| Volume | 19 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 2008 Feb 1 |
| Externally published | Yes |
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Keywords
- Random matching model
- Separate monies
- Uniform money
ASJC Scopus subject areas
- Economics and Econometrics
Cite this
Is uniform money always better than separate monies? / Lee, Manjong.
In: Open Economies Review, Vol. 19, No. 1, 01.02.2008, p. 21-42.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Is uniform money always better than separate monies?
AU - Lee, Manjong
PY - 2008/2/1
Y1 - 2008/2/1
N2 - Previous studies that compare a uniform money with separate monies used models in which money is the only asset and in which individuals hold either zero or one unit of money. Here, the comparison is made using a model in which money coexists with a higher-return asset and in which individuals are permitted to hold richer portfolios of assets. The results show that a general conclusion is not possible. A uniform money has a higher expected utility than do separate monies in many examples. However, when the discount on bonds and uncertainty about the nationality of the trading partner are sufficiently high, then there are examples in which separate monies are better.
AB - Previous studies that compare a uniform money with separate monies used models in which money is the only asset and in which individuals hold either zero or one unit of money. Here, the comparison is made using a model in which money coexists with a higher-return asset and in which individuals are permitted to hold richer portfolios of assets. The results show that a general conclusion is not possible. A uniform money has a higher expected utility than do separate monies in many examples. However, when the discount on bonds and uncertainty about the nationality of the trading partner are sufficiently high, then there are examples in which separate monies are better.
KW - Random matching model
KW - Separate monies
KW - Uniform money
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UR - http://www.scopus.com/inward/citedby.url?scp=38049186671&partnerID=8YFLogxK
U2 - 10.1007/s11079-007-9010-3
DO - 10.1007/s11079-007-9010-3
M3 - Article
AN - SCOPUS:38049186671
VL - 19
SP - 21
EP - 42
JO - Open Economies Review
JF - Open Economies Review
SN - 0923-7992
IS - 1
ER -