Open Economies Review

, Volume 19, Issue 1, pp 21–42 | Cite as

Is Uniform Money Always Better than Separate Monies?

  • Manjong Lee
Research article


Previous studies that compare a uniform money with separate monies used models in which money is the only asset and in which individuals hold either zero or one unit of money. Here, the comparison is made using a model in which money coexists with a higher-return asset and in which individuals are permitted to hold richer portfolios of assets. The results show that a general conclusion is not possible. A uniform money has a higher expected utility than do separate monies in many examples. However, when the discount on bonds and uncertainty about the nationality of the trading partner are sufficiently high, then there are examples in which separate monies are better.


Uniform money Separate monies Random matching model 

JEL Classification

E40 E42 



This paper is a revised version of one of chapters in my dissertation. I am grateful to Neil Wallace for his invaluable advice and guidance. Needless to say, all errors are my own.


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Copyright information

© Springer Science+Business Media, LLC 2007

Authors and Affiliations

  1. 1.School of EconomicsKyung Hee UniversitySeoulKorea

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