Document Type
Article
Publication Date
4-2014
Abstract
According to theory, money supports trade in a world without enforcement and, in particular, in large societies, where gift-exchange is unsustainable. It is demonstrated that, in fact, monetary equilibrium breaks down in the absence of adequate enforcement institutions and it collapses as societies that lack external enforcement grow large. This unique result is derived by unveiling the existence of a tacit enforcement assumption in the literature that explains the advantages from monetary exchange, and by integrating monetary theory with the theory of repeated games and social norms.
Recommended Citation
Camera, Gabriele, and Alessandro Gioffré. "Game-theoretic foundations of monetary equilibrium." Journal of Monetary Economics 63 (2014): 51-63. doi: 10.1016/j.jmoneco.2014.01.001
Peer Reviewed
1
Copyright
Elsevier
Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.
Comments
NOTICE: this is the author’s version of a work that was accepted for publication in Journal of Monetary Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Monetary Economics, volume 63, 2014. DOI: 10.1016/j.jmoneco.2014.01.001
The Creative Commons license below applies only to this version of the article.