Abstract
There is wide agreement that currency was not available in conveniently small denominations prior to the 19th century. Here, estimates of the costs of providing and maintaining money (coins) in 15th century Europe and parameterized versions of a matching model of money are used to find the optimal degree of divisibility. Although the optima are sensitive to the specification of the matching model, the optimal sizes we find agree in order of magnitude with the sizes of the most common coins in 15th century Europe.
| Original language | English |
|---|---|
| Pages (from-to) | 541-556 |
| Number of pages | 16 |
| Journal | Review of Economic Dynamics |
| Volume | 9 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - 2006 Jul 1 |
| Externally published | Yes |
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Keywords
- Coinage in the fifteenth century
- Divisibility of currency
- Matching model
ASJC Scopus subject areas
- Economics and Econometrics
Cite this
Optimal divisibility of money when money is costly to produce. / Lee, Manjong; Wallace, Neil.
In: Review of Economic Dynamics, Vol. 9, No. 3, 01.07.2006, p. 541-556.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Optimal divisibility of money when money is costly to produce
AU - Lee, Manjong
AU - Wallace, Neil
PY - 2006/7/1
Y1 - 2006/7/1
N2 - There is wide agreement that currency was not available in conveniently small denominations prior to the 19th century. Here, estimates of the costs of providing and maintaining money (coins) in 15th century Europe and parameterized versions of a matching model of money are used to find the optimal degree of divisibility. Although the optima are sensitive to the specification of the matching model, the optimal sizes we find agree in order of magnitude with the sizes of the most common coins in 15th century Europe.
AB - There is wide agreement that currency was not available in conveniently small denominations prior to the 19th century. Here, estimates of the costs of providing and maintaining money (coins) in 15th century Europe and parameterized versions of a matching model of money are used to find the optimal degree of divisibility. Although the optima are sensitive to the specification of the matching model, the optimal sizes we find agree in order of magnitude with the sizes of the most common coins in 15th century Europe.
KW - Coinage in the fifteenth century
KW - Divisibility of currency
KW - Matching model
UR - http://www.scopus.com/inward/record.url?scp=33745500614&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=33745500614&partnerID=8YFLogxK
U2 - 10.1016/j.red.2006.05.001
DO - 10.1016/j.red.2006.05.001
M3 - Article
VL - 9
SP - 541
EP - 556
JO - Review of Economic Dynamics
JF - Review of Economic Dynamics
SN - 1094-2025
IS - 3
ER -