The Coexistence of Commodity Money and Fiat Money
نویسندگان
چکیده
In reaction to the monetary turmoil created by the financial crisis of September 2008, both legislative and constitutional reforms have been proposed in different Countries to introduce Commodity Money alongside existing National Fiat Currency. A thorough evaluation of the Economic consequences of these new proposals is warranted. This paper surveys some of the existing knowledge in Monetary and Financial Economics for the purpose of answering the significant Economic questions raised by these new political initiatives.
منابع مشابه
Commodity Money Inflation
This paper presents a theory of inflation in an economy with commodity money and supports it by evidence from the inflationary episodes in France during the fourteenth and fifteenth centuries. The paper shows that commodity money can be inflated similarly to fiat money through repeated debasements, which act like devaluation. Furthermore, as with fiat money, demand for commodity money falls wit...
متن کاملCOMMODITY MONEY AND THE VALUATION OF TRADE By
In a previous essay we modeled the enforcement of contract, and through it the provision of money and markets, as a production function within the society, the scale of which is optimized endogenously by labor allocation away from primary production of goods. Government and a central bank provided fiat money and enforced repayment of loans, giving fiat a predictable value in trade, and also rat...
متن کاملMoney, Inflation, and Output Under Fiat and Commodity Standards
This study examines the behavior of money, inflation, and output under fiat and commodity standards to better understand how changes in monetary policy affect economic activity. Using long-term historical data for 15 countries, the study finds that the growth rates of various monetary aggregates are more highly correlated with inflation and with each other under fiat standards than under commod...
متن کاملFree Banking and the Structure of Production: a Contrast of Competing Banking Systems
THE PURPOSE OF THIS NOTE is to apply an argument developed in Hülsmann (2009) to a claim used in advocacy of fractional reserve banking (FRB) under a system of free banking (that is, a system of banks lacking any formal, central control [as characterizes the state-monopolized central banking systems of the modern Western world]). Hülsmann considers the effects on the structure of production of ...
متن کاملEndogenizing the provision of money: Costs of commodity and fiat monies in relation to the value of trade
We consider the problem of including the costs and value of the institutions that define money and support trade, within the framework of economic optimization.We comparemonetary systemsmediated by durable commodity monies, versus pure fiat monies, in order to understand the separation and eventual independence of the institutionally-created value ofmoney from the values of underlying traded go...
متن کامل