Skip to main content
SpringerLink
Log in

The transactions trust demand for money

The money rate of interest in a one period exchange economy

  • Articles
  • Published:
Journal of Economics Aims and scope Submit manuscript

Abstract

An exchange economy using gold as a means of payment is considered where it is possible to borrow gold in a money market. A positive money rate of interest is encountered as the shadow price of the capacity constraint in an economy without enough gold. The meaning of enough gold and the role of the default penalty are noted in the determination of the interest rate.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Similar content being viewed by others

References

  • Amir, R.; Sahi, S.; Shubik, M.; and Yao, S. (1990): “A Strategic Market Game with Complete Markets.”Journal of Economic Theory, forthcoming.

  • Dubey, P., and Shubik, M. (1978): “The Noncooperative Equilibria of a Closed Trading Economy with Market Supply and Bidding Strategies”.Journal of Economic Theory 17: 1–20.

    Google Scholar 

  • — (1979): “Bankruptcy and Optimality in a Closed Trading Mass Economy Modelled as a Noncooperative Game”.Journal of Mathematical Economics 6: 115–134.

    Google Scholar 

  • — (1981): “Information Conditions Communication and General Equilibrium”.Mathematics of Operations Research 6: 186–189.

    Google Scholar 

  • — (1988): “A Note on an Optimal Garnishing Rule”.Economics Letters 27: 5–6.

    Google Scholar 

  • Dubey, P.; Geanakoplos, J.; and Shubik, M. (1988): “Bankruptcy and Efficiency in a General Equilibrium Model with Incomplete Markets.” CFDP 879.

  • Dubey, P.; (1990): “Gold or Tobacco as an Efficient Means of Exchange and Store of Value”. CFDP 958.

  • Nti, K. O., and Shubik, M. (1984): “Noncooperative Exchange Using Money and Broker-Dealers”.International Journal of Mathematical Social Sciences 7: 59–82.

    Google Scholar 

  • Sahi, S., and Yao, S. (1989): “The Non-cooperative Equilibria of a Trading Economy with Complete Markets and Consistent Prices”.Journal of Mathematical Economics 18: 325–346.

    Google Scholar 

  • Shubik, M. (1987): “Silver and Gold and Liquidity”. CFDP 841.

  • Shubik, M., and Wilson, C. (1977): “The Optimal Bankruptcy Rule in a Trading Economy Using Fiat Money”.Zeitschrift für Nationalökonomie 37: 3–4.

    Google Scholar 

Download references

Author information

Author notes

  1. Martin Shubik

    Present address: Department of Economics, Yale University, Yale Station, P. O. Box 2125, 06520, New Haven, Connecticut, USA

Authors and Affiliations

    Authors
    1. Martin Shubik
      View author publications

      You can also search for this author in PubMed Google Scholar

    Additional information

    Revised from “Enough Gold in a Society Without and With Moneylenders”, CFDP No. 753. The author gratefully acknowledges the support of the Aequus Institute.

    Rights and permissions

    Reprints and permissions

    About this article

    Cite this article

    Shubik, M. The transactions trust demand for money. Journal of Economics Zeitschrift für Nationalökonomie 52, 211–232 (1990). https://doi.org/10.1007/BF01227522

    Download citation

    • Received:

    • Revised:

    • Issue Date:

    • DOI: https://doi.org/10.1007/BF01227522

    Keywords

    Search

    Navigation