Article ID Journal Published Year Pages File Type
967177 Journal of Monetary Economics 2012 11 Pages PDF
Abstract
► We study the interaction between competition and trust in the private provision of money. ► With commitment, competition ensures efficiency, for any substitutability across currencies. ► Without commitment, there is a bound on efficiency, corresponding to non-negative inflation. ► And competition plays no role in enhancing efficiency. ► We discuss the analogy between competition in currencies and competition in experience goods.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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