Choice of Currency and Other Topics

  • M. L. Burstein


Klein (1974a) and Hayek (1976) argue that, if transactions costs permit, a number of currencies, each with its own metric, will compete so that the transactors will gravitate towards currencies that stretch and squirm least, causing better-behaved to oust worse-behaved ones. They do not stress enough that there is now choice between national currencies (see Burstein, 1978). True, greed for seigneurage causes governments to seek currency monopolies, partly under cover of legal tender acts — a point pounced on by Hayek. Still, in the real world, where information is costly, official currencies, sometimes one or two, may naturally dominate a national market.


Central Bank Inertial Reference Frame Monetary Base Legal Tender Fractional Reserve 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Copyright information

© M.L. Burstein 1986

Authors and Affiliations

  • M. L. Burstein

There are no affiliations available

Personalised recommendations