Double Coincidence of Wants and the Essentiality of Money
| Authors | |
|---|---|
| Year of publication | 2010 |
| Type | Article in Proceedings |
| Conference | New Economic Challenges 2010 |
| MU Faculty or unit | |
| Citation | |
| Web | http://is.muni.cz/do/1456/sborniky/10407573/NewEconomicChallenges2010.pdf |
| Field | Economy |
| Keywords | Money; Double Coincidence of Wants; Search models; Infinite games |
| Description | This paper is focused on the microeconomic foundation of the theory of money. I argue that the absence of double coincidence of wants per se is not able to explain the existence of money. The argument has two parts. First, I argue that existing models without double coincidence of wants include also other frictions. Second, I show that double coincidence of wants is neither sufficient nor necessary condition for the essentiality of money. Game theory is applied for this purpose. Finally the paper provides indirect support for the claim that money is a record-keeping device that solves the problem of imperfect monitoring. |