Can Monetizing Trade Lower Welfare? An Example

Authors

Gabriele Camera, Chapman UniversityFollow
Robert R. Reed, University of Alabama
Christopher Waller, University of Notre Dame

Document Type

Article

Publication Date

2003

Abstract

In decentralized trade individuals self-insure against consumption risk via costly diversification of skills. Although money acts as consumption insurance, it may lead to a moral hazard problem. If the problem is severe, monetizing trade can lower welfare relative to barter.

Comments

NOTICE: this is the author’s version of a work that was accepted for publication in Economics Letters. 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 Economics Letters, volume 81, issue 2 (2003). DOI: 10.1016/S0165-1765(03)00168-X

The Creative Commons license below applies only to this version of the article.

Recommended Citation

Camera, G., R. Reed and C. Waller (2003). Can monetizing trade lower welfare? An example. Economics Letters 81(2), 33-40. doi: 10.1016/S0165-1765(03)00168-X

Peer Reviewed

1

Copyright

Elsevier

Creative Commons License

This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.