Optimal Denominations for Coins and Bank Notes: In Defense of the Principle of Least Effort.

A number of recent articles argue that the "problem of Bachet"--the problem of finding the most efficient set of standard weights--can shed light on the problem of finding the optimal denominations of coins and bank notes. The present note opposes this view and shows that the two problems are different in a key way. It also argues that finding the optimal denominational structure is a multicriteria optimization problem, in which the principle of least effort should be given the greatest weight.