To access the full text documents, please follow this link:

On money as a medium of exchange when goods vary by supply and demand
Cuadras, Xavier; Wright, Randall
Universitat Pompeu Fabra. Departament d'Economia i Empresa
Models of the exchange process based on search theory can be usedto analyze the features of objects that make them more or less likely toemerge as ``money'' in equilibrium. These models illustrate the trade--offbetween endogenous acceptability (an equilibrium property) and intrinsiccharacteristics of goods, such as storability, recognizability, etc. Inthis paper, we look at how the relative supply and demand for various goodsaffect their likelihood of becoming money. Intuitively, goods in highdemand and/or low supply are more likely to appear as commodity money,subject to the qualification that which object ends up circulating as amedium of exchange depends at least partly on convention. Welfare propertiesare discussed.
Macroeconomics and International Economics
medium of exchange
search theory
L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
Working Paper

Show full item record