. Specifically, they characterize the optimal return on money in the presence of credit arrangements. There is a dual role for credit …: It allows buyers to trade without fiat money and also permits them to borrow against future income. However, not all … traders have access to credit. As a result, there is a social role for fiat money because it allows agents to self …

analyze the impact that transactions credit has on interest rates and prices. We find that the availability of credit …

money and unrestricted money holdings. He shows that when trade takes place in Walrasian markets, counterfeits circulate and …