This paper presents a model where societies whose population expands, experience advances in specialization at the cost of diluted monitoring, which limits enforcement and hinders trade possibilities. Cash and private circulating instruments can replace monitoring. Advances in specialization may...

This paper addresses the "rate of return" puzzle of monetary theory. Similarly to the legal restrictions theory of the demand for money, we assume that Government bonds are subject to a minimum purchase requirement. Differently from this theory, however, we assume that intermediaries, when...

We propose a model in which money performs an essential role in the process of exchange, despite the presence of a multilateral clearing house. Agents are assumed to be anonymous and unable to make binding commitments. The clearing house can detect deviations but it cannot identify the...