Government transaction policy and Gresham's law

• 成果类型: Article
• 署名作者: Li, YT
• 署名单位: National Tsing Hua University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/S0304-3932(01)00110-6
• 发表日期: 2002
• 页码: 435-453
• 关键词: commodity money; Gresham's law; Government policy

摘要

A search-theoretic model is used to study how legal. restrictions may account for the fact that Gresham's law sometimes holds but other times fails. Legal restrictions is modeled here as policies that government adopts in the transactions with private agents, such as at what prices it accepts a currency in exchange for goods and at what ratios it conducts currency exchange. A government policy sufficiently favorable to light coins can induce the existence of an equilibrium where both coins circulate and light coins are even accepted at a premium. A policy favorable to heavy coins may increase their value to such an extent that they are hoarded from circulation, when this equilibrium did not exist without interventions. (C) 2002 Elsevier Science B.V. All rights reserved.