Monday, October 15, 2012

Quasi-Commodity Money

By George Selgin
University of Georgia
Monday, February 6, 2012

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2000118

Abstract

This paper considers reform possibilities posed by a type of base money that has heretofore been overlooked in the literature on monetary economics. I call this sort of money 'quasi-commodity money' because it shares features with both commodity money and fiat money, as these are usually defined, without fitting the conventional definition of either; examples of such money are Bitcoin and the 'Swiss dinars' that served as the currency of northern Iraq for over a decade. I argue that the attributes of quasi-commodity money are such as might supply the basis for a monetary regime that does not require oversight by any monetary authority, yet is capable of providing for all such changes in the money stock as may be needed to achieve a high degree of macroeconomic stability.

For further reading:
"The Rise and Fall of the Gold Standard in the United States", George Selgin, University of Georgia, August 27, 2012

1 comment:

  1. Great brain food!

    The Bitcoin commmunity should particularly note the conclusion (p25) that Bitcoin must *inherently* remain an unofficial money.

    "The unofficial status of both of the real-world instances of quasi-commodity money considered here is therefore more than just an incidental feature of those monies."

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