This paper studies how government uses inflation tax to finance public goods affects the circulation of a national currency in a two-country search theoretic model. Each country consists of infinitely-lived private agents and a government. A representative agent obtains utility from the private...

NOTE: The following is a description of the paper and not the actual abstract. We study whether compulsory public provision or voluntary private provision of public goods can survive when individuals who "vote with their feet" can choose between communities that differ in the way that public...

We study whether "coercive" public provision or voluntary private provision of public goods can survive when individuals who "vote with their feet" can choose between communities that differ in the way that public goods are provided. We obtain the following findings: (i) an equilibrium always...