Competition between Variable–Supply and Fixed–Supply Currencies

For one variable–supply currency in isolation, player’s Cobb–Douglas utility depends on the current supply divided by initial supply, multiplied inverse of accumulative inflation/deflation. With equal weight assigned to both factors, money printing outweighs inflation, and withdrawal deflation. The study design is analyze how competition between fixed–supply impacts choice currency. Applying 1959–2021 US M2 data 1635–2021 inflation data, increases over time when assigning high printing/withdrawal less or decreases overall different player support for two currencies, depending each currency’s backing, convenience, confidentiality, transaction efficiency, financial stability, security, replicator dynamics used determine volume fraction transactions Low, high, increasing, decreasing a are analyzed. Each may increase, decrease, be U–shaped, approach low levels time. example, cause eventually prefer unless supports highly increasingly.