Search for a Theory of Money

40 Pages Posted: 27 Jun 2007 Last revised: 14 Jul 2010

See all articles by Nobuhiro Kiyotaki

Nobuhiro Kiyotaki

Princeton University - Department of Economics

Randall Wright

University of Wisconsin - Madison - Department of Finance, Investment and Banking; Federal Reserve Banks - Federal Reserve Bank of Minneapolis

Date Written: October 1990

Abstract

The classical and early neoclassical economists knew that the essential function of money was its role as a medium of exchange; Recently, this idea has been formalized using search-theoretic noncooperative equilibrium models of the exchange process. The goal of this paper is to use a simple model of this class to analyze four substantive issues in monetary economics: the interaction between specialization and exchange, dual fiat currency regimes, the welfare improving role of money, and the susceptibility of monetary economies to extrinsic uncertainty.

Suggested Citation

Kiyotaki, Nobuhiro and Wright, Randall D., Search for a Theory of Money (October 1990). NBER Working Paper No. w3482, Available at SSRN: https://ssrn.com/abstract=987271

Nobuhiro Kiyotaki (Contact Author)

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

Randall D. Wright

University of Wisconsin - Madison - Department of Finance, Investment and Banking ( email )

975 University Avenue
Madison, WI 53706
United States
608-263-3860 (Phone)

Federal Reserve Banks - Federal Reserve Bank of Minneapolis

90 Hennepin Avenue
Minneapolis, MN 55480
United States

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