Topic
Currency
About: Currency is a research topic. Over the lifetime, 26697 publications have been published within this topic receiving 485370 citations. The topic is also known as: monetary unit & unit of money.
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TL;DR: In this article, the authors developed a monetary approach to the theory of currency devaluation, where the role of the real balance effect was emphasized and a distinction was drawn between the relative prices of goods, the exchange rate and the price of money in terms of goods.
Abstract: This paper develops a monetary approach to the theory of currency devaluation.1 The approach is "monetary" in several respects. The role of the real balance effect is emphasized and a distinction is drawn between the relative prices of goods, the exchange rate and the price of money in terms of goods. Furthermore, money is treated as a capital asset so that the expenditure effects induced by a monetary change are spread out over time and depend on the preferred rate of adjustment of real balances.2 The latter aspect gives rise to the analytical distinction between impact and long-run effects of a devaluation. The first part of this paper develops a one-commodity and two-country model of devaluation. The simplicity of that structure is chosen quite deliberately to emphasize the monetary aspect of the problem as opposed to the derivative effects that arise from induced changes in relative commodity prices. Trade is viewed as the exchange of goods for money or a means of redistributing the world supply of assets. A devaluation is shown to give rise to a change in the level of trade and the terms of trade, the price of money in terms of goods. In the second part the implications of the existence of nontraded goods are investigated, and induced changes in the relative prices of home goods enter the analysis.
271 citations
TL;DR: In this article, a monetary model is constructed, where seasonal variations in the demand for liquidity and credit play a critical role in generating banking panics, and empirical evidence from Canada and the United States for the period 1880-1910 is largely consistent with the predictions of the model.
Abstract: Existing models of banking panics contain no role for monetary factors and fail to explain why some banking systems experienced panics while others did not. A monetary model is constructed, where seasonal variations in the demand for liquidity and credit play a critical role in generating banking panics. These panics occur when there are restrictions on the issue of currency in private banks, but they do not occur if banks are unrestricted. Empirical evidence from Canada and the United States for the period 1880-1910 is largely consistent with the predictions of the model.
271 citations
TL;DR: The monetary role of government is agreed to include, at a minimum, the monopolistic supply of a currency, into which all privately supplied demand deposits should be convertible as mentioned in this paper, which is the same as the role of a bank.
Abstract: FEW AREAS OF ECONOMIC AcTIvrrY can claim as long and unanimous a record of agreement on the appropriateness of governmental intervention as the supply of money.l Very early in our history money was recognized by policy makers to be "special," and individuals fearful of government influence in other areas of economic life readily acknowledged that government had a primary role in controlling monetary arrangements. Free market advocates who now argue for, among other things, unregulated entry and the elimination of all interest rate and portfolio restrictions do not opt for a completely unregulated money industry, but recognize that money has unique characteristics which require that it not be supplied freely as an ordinary good. The monetary role of government is agreed to include, at a minimum, the monopolistic supply of a currency, into which all privately supplied demand deposits should be convertible. In
271 citations
TL;DR: The authors developed a simple general equilibrium framework to study the effect of the exchange rate system on trade and welfare and found that trade is unaffected by the exchange-rate system, consistent with most evidence.
Abstract: We develop a simple general equilibrium framework to study the effect of the exchange rate system on trade and welfare. An important feature of the model is deviations from purchasing power parity, caused by rigid price setting in buyers' currency. We find the following. First, exchange rate stability is not necessarily associated with more trade.In a simple benchmark model with separable preferences and only monetary shocks, trade is unaffected by the exchange rate system, consistent with most evidence. Second, both trade and welfare can be higher under either exchange rate system, depending on preferences and on the monetary policy rules followed under each system. Finally, in general there is no one-to-one relationship between the levels of trade and welfare across exchange rate systems.
270 citations
17 Jun 2014
TL;DR: A limited set of entities controls Bitcoin's services, decision-making, mining, and incident resolution processes, bypassing the will of the multitude of users that populate the network.
Abstract: Bitcoin has achieved popularity by promising users a fully decentralized, low-cost virtual currency system. However, a limited set of entities controls Bitcoin's services, decision-making, mining, and incident resolution processes. These entities can decide Bitcoin's fate, bypassing the will of the multitude of users that populate the network.
270 citations