Affiliation:
1. University of California, Irvine ()
2. University of California, Irvine, and LEMMA, University of Paris 2, Pantheon-Assas ()
Abstract
We develop a random-matching model to study the price dynamics of monies produced privately according to a time-consuming mining technology. For our leading example, there exists a unique equilibrium where the value of money increases over time and reaches a steady state. There is also a continuum of perfect-foresight equilibria where the price of money inflates and bursts gradually over time. Initially, money is held for a speculative motive, but it acquires a transactional role as it becomes sufficiently abundant. We study fiat, commodity, and crypto monies, endogenous acceptability, and adopt implementation and equilibrium approaches. (JEL E31, E42, E51, N13, N14, N23, N24)
Publisher
American Economic Association
Subject
General Economics, Econometrics and Finance
Cited by
12 articles.
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