Famous Myths of "Fiat Money"

  title={Famous Myths of "Fiat Money"},
  author={Dror Goldberg},
  journal={Journal of Money, Credit, and Banking},
  pages={957 - 967}
  • Dror Goldberg
  • Published 2005
  • Economics
  • Journal of Money, Credit, and Banking
The paper re-evaluates the conventional wisdom regarding the existence of moneys that supposedly circulated without any legal status or intrinsic value. Economists call these objects "fiat money." I re-examine the most famous examples of such objects from primitive societies, such as the stone money of Yap and seashells, which have been cited by some of the most prominent monetary economists. I find that actually none of these cases is an evidence of "fiat money." A general conclusion is that… Expand
Fiat Money, Individual Rationality and Production
Wallace's ‘Monetary Dictum’ insists that monetary models must specify why the monetary object is so used. Another important specification is that the use of this object as money should always beExpand
On the Coexistence of Money and Bonds
This paper re-examines the so-called coexistence puzzle in terms of a modified version of the legal restrictions hypothesis initially put forth by Bryant and Wallace (1980). The modification is inExpand
On the Centrality of Redemption: Linking the State and Credit Theories of Money Through a Financial Approach to Money
The paper presents a financial approach to monetary analysis that links the credit and state theories of money. A premise of the functional approach to money is that "money is what money does." InExpand
Monetary Mechanics: A Financial View
This paper develops the framework of analysis of monetary systems put together by authors such as Macleod, Keynes, Innes, and Knapp. This framework does not focus on the functions performed by anExpand
Synthesizing State and Spontaneous Order Theories of Money
What role does government play in determining the medium of exchange? Economists weighing in on the issue typically espouse one of two views. State theorists credit government with the emergence andExpand
On the Origin of Money∗ INCOMPLETE
The widely accepted account of the origin of money (see, e.g., Menger 1892) is that it grew out of the inefficiency of barter. This efficiency view of the origin of money, however, does not squareExpand
A Model of Fiat Money
Fiat money is usually defined in the literature as an intrinsically useless unbacked token. At times, it appears that the token is usually restricted further to exist in tangible form—but this seemsExpand
Money and Production: A Pluralist Analysis
The purpose of this thesis is to argue that the core of a monetary economy is a network of triangular contracts between banks, firms, workers and capital goods suppliers. Not only does this networkExpand
Cigarettes, dollars and bitcoins – an essay on the ontology of money
Abstract What does being money consist in? We argue that something is money if, and only if, it is typically acquired in order to realise the reduction in transaction costs that accrues in virtue ofExpand
Money as an Institution and Money as an Object
Abstract The folk conception of money as an object is not a promising starting point to develop general, explanatory metaphysical accounts of the social world. A theory of institutions as rules inExpand


A Search-Theoretic Approach to Monetary Economics
The essential function of money is its role as a medium of exchange. The authors formalize this idea using a search-theoretic equilibrium model of the exchange process that captures the "doubleExpand
Famous First Bubbles
T he jargon of economics and finance contains numerous colorful expressions to denote a market-determined asset price at odds with any reasonable economic explanation. Such words as "tulip mania,"Expand
A hybrid fiat—Commodity monetary system
In this paper I describe a ?monetary? system in which backing is provided for the government?s liabilities by way of contingent resort to taxes. The system has some of the features of a commodityExpand
A contribution to the pure theory of money
We analyze a general equilibrium model with search frictions and differentiated commodities. Because of the many differentiated commodities, barter is difficult because it requires a doubleExpand
On Money as a Medium of Exchange
We analyze economies in which individuals specialize in consumption and production and meet randomly over time in a way that implies that trade must be bilateral and quid pro quo. Nash equilibria inExpand
Macroeconomics - 5th Edition
Robert Barro's Macroeconomics has become the classic textbook presentation of the equilibrium approach to macroeconomics. In its first four editions, this book has shown undergraduates howExpand
An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money
M Y FIRST published paper' has come of age, and at a time when the subjects it dealt with have come back into fashion. It developed the equilibrium conditions for a rational consumer's lifetimeExpand
Wampum and Its History
The North American Indians ought to stand high in the list of barbarians, since they possessed an aboriginal money of recognizeid value, although it had no sanction other than common custom. Expand
The Big Problem of Small Change
The medieval money supply mechanism implemented a commodity standard throughout the denomination structure by imposing mint and melt points for each coin. Mints stood ready to sell (but not to buy)Expand
The New Palgrave Dictionary of Money and Finance
The New Palgrave Dictionary of Money and Finance is a successor to the 1987 work The New Palgrave: A Dictionary of Economics. Both dictionaries claim descent from Palgrave's Dictionary of PoliticalExpand