Inseparability of Transaction Medium and Store of Value in the Role of Money

DOI: 10.4236/tel.2013.34038   PDF   HTML     3,253 Downloads   4,640 Views   Citations

Abstract

We analyze whether or not money can be circulated as a purely transaction medium in the search theory. We obtain the following result: unless the role of a store of value added to the function of money, money does not circulate and the economy degenerates into a barter economy.

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M. Otaki, "Inseparability of Transaction Medium and Store of Value in the Role of Money," Theoretical Economics Letters, Vol. 3 No. 4, 2013, pp. 226-228. doi: 10.4236/tel.2013.34038.

Conflicts of Interest

The authors declare no conflicts of interest.

References

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[2] P. A. Diamond, “Aggregate-Demand Management in Search Equilibrium,” Journal of Political Economy, Vol. 90, No. 5, 1882, pp. 881-894. doi:10.1086/261099
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[4] M. Otaki, “The Dynamically Extended Keynesian Cross and the Welfare-Improving Fiscal Policy,” Economics Letters, Vol. 96, No. 1, 2007, pp. 23-29. doi:10.1016/j.econlet.2006.12.005

  
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