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.

Game-theoretic foundations of monetary equilibrium / Camera, Gabriele*; Gioffré, Alessandro. - In: JOURNAL OF MONETARY ECONOMICS. - ISSN 0304-3932. - STAMPA. - 63:(2014), pp. 51-63. [10.1016/j.jmoneco.2014.01.001]

Game-theoretic foundations of monetary equilibrium

Camera, Gabriele
;
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.
2014
Game-theoretic foundations of monetary equilibrium / Camera, Gabriele*; Gioffré, Alessandro. - In: JOURNAL OF MONETARY ECONOMICS. - ISSN 0304-3932. - STAMPA. - 63:(2014), pp. 51-63. [10.1016/j.jmoneco.2014.01.001]
Camera, Gabriele*; Gioffré, Alessandro
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/635706
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