Nominal Exchange Rate Determinacy under the Threat of Currency Counterfeiting

• 成果类型: Article
• 署名作者: Gomis-Porqueras, Pedro; Kam, Timothy; Waller, Christopher
• 署名单位: Deakin University; Australian National University; Federal Reserve System - USA; Federal Reserve Bank - St. Louis
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20150172
• 发表日期: 2017
• 页码: 256-273
• 关键词: monetary-policy; international currency; search model; prices; money; INFORMATION; liquidity; FRAMEWORK

摘要

We study the endogenous choice to accept fiat objects as media of exchange and their implications for nominal exchange rate determination. We consider a two-country environment with two currencies that can be used to settle any transactions. However, currencies can be counterfeited at a fixed cost and the decision to counterfeit is private information. This induces equilibrium liquidity constraints on the currencies in circulation. We show that the threat of counterfeiting can pin down the nominal exchange rate even when the currencies are perfect substitutes, thus breaking the famous Kareken-Wallace indeterminacy result.