Counterfeiting as private money in mechanism design

We describe counterfeiting activity as the issuance of private money, one which is difficult to monitor. Our approach, which amends the basic random-matching model of money in mechanism design, allows a tractable welfare analysis of currency competition. We show that it is not efficient to eliminate counterfeiting activity completely. We do not appeal to lottery devices, and we argue that this is consistent with imperfect monitoring.

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Year of publication:	2007
Authors:	Cavalcanti, Ricardo ; Nosal, Ed
Institutions:	Federal Reserve Bank of Cleveland
Subject:	Counterfeits and counterfeiting \| Money

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Extent:	application/pdf
Series:	Working Paper.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 0716
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005729095