Denominations, Pairwise Trade and Social Welfare

• 영문명: Denominations, Pairwise Trade and Social Welfare
• 발행기관: 한국계량경제학회
• 저자명: Manjong Lee
• 간행물 정보: 『한국계량경제학회 학술대회 논문집』2008년 하계학술대회, 1~26쪽, 전체 26쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2008.08.30

영문 초록

This paper provides an explanation for the nature of real effect of denomination structures against parameterized matching models of money. In a pairwisetrade model, transactions are subjected to denomination portfolios held by a buyer and a seller. Also, disutility associated with the number of monetary items exchanged has a distortional effect on output in pairwise meetings. Hence, different denomination structures imply different trading outcomes. Our results show that with monetary expansion, output produced per unit of money decreases more rapidly in a single denomination than in multiple denominations, and hence welfare difference between them increases. The results of a comparison between a binary-decimal structure adopted by most modern economies and a decimal-pair structure adopted by some far-east Asian countries depend on trading distributions: if output produced in a pairwise meeting is generally small relative to what is socially optimal, a binary-decimal structure is better than a decimal-pair structure, and vice versa.

목차

1 Introduction

2 The Model

3 A Steady State

4 Comparisons across Different Denominations

5 Concluding Remarks

6 Appendix

키워드

denominations matching model welfare