The Optimal Denomination of Currency: A Conjecture

Journal of Money, Credit And Banking, Vol. 29, No. 4, Part 1 (November 1997)

Posted: 6 Nov 1997  

Adrian E. Tschoegl

University of Pennsylvania - Management Department

Abstract

Telser (1995) and Sumner (1993) argue that the optimal system of denominations of currency would consist of a sequence of denominations that differed from each other by a factor of three. The fact is that today no currency follows the powers-of-three principle. I argue that existing currency systems are the result of an evolution over time that is subject to historical influences and social factors, especially the counting systems that societies use.

JEL Classification: E42

Suggested Citation

Tschoegl, Adrian E., The Optimal Denomination of Currency: A Conjecture. Journal of Money, Credit And Banking, Vol. 29, No. 4, Part 1 (November 1997). Available at SSRN: https://ssrn.com/abstract=40080

Adrian E. Tschoegl (Contact Author)

University of Pennsylvania - Management Department ( email )

The Wharton School
Philadelphia, PA 19104-6370
United States

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