In this paper, a variant of Kiyotaki and Wright model of emergence of money is investigated. In the model, each good has different durability rather than storage cost assumed in Kiyotaki and Wright model. Two goods are infinitely durable but one is not durable. With certain condition, non...

We present an infinite horizon model with capital in which fiat money and barter are two competing means of payment. Fiat money has value because barter is limited by the extent of a double coincidence of wants. The pattern of exchange generally involves both money and barter. We find that the...

We present an infinite horizon model with capital in which fiat money and barter are two competing means of payment. Fiat money has value because barter is limited by the extent of a double coincidence of wants. The pattern of exchange generally involves both money and barter. We find that the...