Adaptive Learning and the Transition to Fiat Money

  title={Adaptive Learning and the Transition to Fiat Money},
  author={George A. Selgin},
  journal={Monetary Economics},
This article explores some implications of adaptive learning for monetary evolution using a search-theoretic framework that allows for media-of-exchange network effects. Adaptive learning precludes any voluntary transition to a fiat standard from a non-monetary state of nature and can account for the historically-observed tendency for fiat monetary standards to emerge only following the prior appearance of commodity money and the widespread employment of redeemable banknotes. Adaptive learning… Expand
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