Four Principles for a Base Money Regime
20 Pages Posted: 18 Nov 2019
Date Written: October 30, 2019
What does an ideal base money look like? I maintain that it is (1) stable, (2) demand-elastic, (3) global, and (4) incentive-compatible. I conclude that, since most real world monies fall short of the ideal on one margin or another, one must consider the trade offs when ranking the available alternatives.
Keywords: base money; bitcoin; fiat money; gold; gold standard
JEL Classification: E42, E51, E52, E58
Suggested Citation: Suggested Citation