Money and credit with limited commitment and theft

• 成果类型: Article
• 署名作者: Sanches, Daniel; Williamson, Stephen
• 署名单位: Washington University (WUSTL); Federal Reserve System - USA; Federal Reserve Bank - Richmond; Federal Reserve System - USA; Federal Reserve Bank - St. Louis
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2009.12.002
• 发表日期: 2010
• 页码: 1525-1549
• 关键词: money; credit; Imperfect memory; theft; optimal monetary policy

摘要

We study the interplay among imperfect memory, limited commitment, and theft, in an environment that can support monetary exchange and credit. Imperfect memory makes money useful, but it also permits theft to go undetected, and therefore provides lucrative opportunities for thieves. Limited commitment constrains credit arrangements, and the constraints tend to tighten with imperfect memory, as this mitigates punishment for bad behavior in the credit market. Theft matters for optimal monetary policy, but at the optimum theft will not be observed in the model. The Friedman rule is in general not optimal with theft, and the optimal money growth rate tends to rise as the cost of theft falls. (C) 2009 Elsevier Inc. All rights reserved.