Jump to ContentJump to Main Navigation
The Guidance of an Enterprise Economy$
Users without a subscription are not able to see the full content.

Martin Shubik and Eric Smith

Print publication date: 2016

Print ISBN-13: 9780262034630

Published to MIT Press Scholarship Online: May 2017

DOI: 10.7551/mitpress/9780262034630.001.0001

Show Summary Details
Page of

PRINTED FROM MIT PRESS SCHOLARSHIP ONLINE (www.mitpress.universitypressscholarship.com). (c) Copyright The MIT Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in MITSO for personal use.date: 03 July 2022

Endogenizing the Choice of a Monetary System1

Endogenizing the Choice of a Monetary System1

Chapter:
(p.117) 5 Endogenizing the Choice of a Monetary System1
Source:
The Guidance of an Enterprise Economy
Author(s):

Martin Shubik

Eric Smith

Publisher:
The MIT Press
DOI:10.7551/mitpress/9780262034630.003.0005

In this chapter we introduce our first multi-timescale models of an economy. Longer timescales are associated with commitment to product specialization and to discounting and depreciation of durable goods. We compare an economy mediated by a durable commodity money, such as gold, with one with a fiat money implemented through a bureaucracy. The inefficiency costs associated with asymmetric strategic roles between money-providers and producers of consumption goods are compared with explicit losses of material productivity due to labor costs required to maintain a bureaucracy needed to manage a fiat money system. It is shown how a stable trade system can emerge. We discuss material and institutional capital stock in an economy and note that capital stock acts much like the stock of catalysts used to enable chemical reactions. In a framework such as General Equilibrium, capital stock vanishes from the net input-output relations in an abstract production correspondence.

Keywords:   Commodity money, fiat money, bureaucracy, depreciation, trust

MIT Press Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us.