The Microfoundations of Monetary Theory

Hen schel, No be A icle The Mic o ounda ions o Mone a y Theo y K edi und Kapi al P o ided in Coope a ion wi h: Duncke & Humblo , Be lin Sugges ed Ci a ion: Hen schel, No be (1976) : The Mic o ounda ions o Mone a y Theo y, K edi und Kapi al, ISSN 0023-4591, Duncke & Humblo , Be lin, Vol. 9, Iss. 1, pp. 70-100, h ps://doi.o g/10.3790/ccm.9.1.70 This Ve sion is a ailable a : h ps://hdl.handle.ne /10419/292757 S anda d-Nu zungsbedingungen: Die Dokumen e au EconS o dü en zu eigenen wissenscha lichen Zwecken und zum P i a geb auch gespeiche und kopie we den. Sie dü en die Dokumen e nich ü ö en liche ode komme zielle Zwecke e iel äl igen, ö en lich auss ellen, ö en lich zugänglich machen, e eiben ode ande wei ig nu zen. So e n die Ve asse die Dokumen e un e Open-Con en -Lizenzen (insbesonde e CC-Lizenzen) zu Ve ügung ges ell haben soll en, gel en abweichend on diesen Nu zungsbedingungen die in de do genann en Lizenz gewäh en Nu zungs ech e. Te ms o use: Documen s in EconS o may be sa ed and copied o you pe sonal and schola ly pu poses. You a e no o copy documen s o public o comme cial pu poses, o exhibi he documen s publicly, o make hem publicly a ailable on he in e ne , o o dis ibu e o o he wise use he documen s in public. I he documen s ha e been made a ailable unde an Open Con en Licence (especially C ea i e Commons Licences), you may exe cise u he usage igh s as speci ied in he indica ed licence. h ps://c ea i ecommons.o g/licenses/by/4.0/ The Mic o ounda ions o Mone a y Theo y"' By No be Hen schel, Vienna I. In oduc ion Recen discussions o he op imali y o mone a y exchange ha e di- ec ed he a en ion o economis s o se e al impo an bu p e iously unapp ecia ed weaknesses in he mic o ounda ions o mone a y heo y, In he Wal as-Hicks-Pa inkin adi ion, he goal o mone a y heo y has been o p esen a pic u e o a mone a y economy which would be a logical ex ension o he s anda d heo y o alue. Wal as b ough he equa ion o he o e and he demand o money in o line wi h he es o his sys em by making a dis inc ion be ween he s ock o money, assumed o be wi hou u ili y o i s own, and he "se ices o a ail- abili y" o he s ock which does con ibu e o one's well-being. Jus as no inqui y is made in o he sou ces o sa is ac ion om o he goods, he se ices o a ailabili y a e simila ly unques ioned. Money, ha "unique" asse , is gene ally ea ed as jus ano he consume du able good which yields a low o ill-de ined nonobse able se ices, o e ing he indi idual "con enience, secu i y and liquidi y". The adi ional neoclassical mone a y app oach unde lying much o he impo an wo k o Pa inkin, Samuelson, F iedman and Johnson, in oduces eal cash balances di ec ly in o he u ili y unc ion, and e e s o he cos s o exchange be ween money and goods al hough hese cos s a e no made explici in he analysis. Howe e , once money is ea ed as an a gumen o he u ili y unc ion, many o he in e es ing ques ions conce ning why an economy uses money a he han ba e , o how i chooses i s money, a e essen ially supp essed (B unne and Mel ze , 1971). In o he * The pape was w i en while he au ho was isi ing he Ins i u e o So- cial and Economic Resea ch and he Depa men o Economics, Uni e si y o Yo k (England). I bene i ed g ea ly om an ex ensi e con e sa ion wi h P o- esso Robe Clowe and I would like o hank him o his help ul commen s. Thanks a e due o he pa icipan s o a S a Semina in he Depa men o Economics, Uni e si y o Yo k, o a numbe o aluable sugges ions on an ea lie d a o his pape . OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/ccm.9.1.70 | Gene a ed on 2023-01-16 13:33:08 The Mic o ounda ions o Mone a y Theo y 71 wo ds, he analy ical de ice o ea ing eal money balances as an a - gumen in u ili y unc ions se es o mally o gene a e a demand o money, bu i simul aneously ules ou deepe analysis o he economics o mone a y exchange. Recen ly, se e al heo is s ha e sugges ed ha i migh be use ul o dig a li le mo e deeply, and o ask why money is held a all. This poses a dilemma. How o make money appea wi hou making he s an- da d heo y o gene al equilib ium disappea ? The heo y o alue has been cul i a ed o i s p esen high le el as a model o exchange in which money does no appea . A ow/Deb eu- ype models wo k "wi hou he help o a good se ing as a medium o exchange" (Deb eu, 1959, p. 28). Unlike he Pa inkin app oach ( ep esen ing he mode n a emp o de elop a mone a y heo y on Wal asian ounda ions), which le he s anda d heo y in ac and elied on concep ual appendages o in oduce money, he ecen app oaches o ce us o look o modi ica ions wi hin he body o he heo y. In he las ew yea s, mone a y heo is s seem o ha e eached a con- sensus ha Wal asian gene al equilib ium heo y p o ides an inadequa e mic o ounda ion o mone a y heo y. Wal asian heo y canno e en ex- plain he simples and mos commonplace mone a y phenomena. Tha his became appa en may be a ibu ed o he wo ks o Clowe and Hahn. To illus a e hese de iciencies, conside Clowe 's (1967) p oposal o in oduce money in o he s anda d heo y. His sugges ion was o add o he exis ing budge cons ain he injunc ion ha cu en pu chases be inanced by sale o money only, no by cu en supplies o o he commodi ies. This modi ica ion, howe e , con adic s he belie ha he in oduc ion o money imp o es he alloca ion o esou ces because i na ows he se o pe missible exchanges compa ed o i s ba e coun- e pa . Clowe 's cons ain makes no sense in he Wal asian model o exchange, bu o a pe ec ly sensible eason: one canno append wha is a ading cons ain o a model which igno es ade. One u he de iciency was p esen ed by Hahn (1965) and has o do wi h he equilib ium p ope ies o Pa inkin's sys em. Suppose he ac- coun ing p ice o money in a Pa inkin economy we e se equal o ze o. This would mean ha money had no alue in exchange, and clea ly would no be demanded by anyone ee om "money illusion". How- e e , Hahn showed ha whene e i s accoun ing p ice is equal o ze o, an equilib ium will necessa ily exis o he sys em (gi en he app o- p ia e con inui y assump ions) o which his accoun ing p ice will be OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/ccm.9.1.70 | Gene a ed on 2023-01-16 13:33:08 72 No be Hen sdiel equal o ze o. In o he wo ds, he Pa inkin economy has an equilib ium in which no one uses money. Thus, doing away wi h money in Pa in- kin3 s economy migh ha e no signi ican consequences. These wo examples a e enough o demons a e ha he essen ial elemen s o mone a y heo y a e missing om he Wal asian ame- wo k (Howi y 1973). When Pa inkin ied o in eg a e he Wal asian analysis wi h mone a y heo y he in oduced money beginning o he analysis. Bu he ailed o cons ain he ansac o 's exchange oppo u- ni ies by p io possession o money (Clowe , 1967). Jus as Wal as had done, Pa inkin a ionalized he demand o money by he need o a ansac o o p esen i in o de o ecei e he goods deli e ed a e he p icing mechanism had de e mined (so we we e old) which exchanges we e o ake place. In u h, he e is no eason o suppose ha any exchanges we e implied by he analysis, because he budge cons ain s o he ansac o s do no e e o speci ic exchanges. Hence we a i e a Hahn's conclusion ha Pa inkin's economy could unc ion wi hou money. Because Pa inkin ailed o es ic he ansac o s o mone a y exchange, i ollows ha he could no a oid Glowe 's indings ha money plays no essen ial ole in he ba gaining p ocess. Fu he mo e, Clowe has shown con incingly ha he designa ion o "medium o exchange" canno be applied o any single commodi y in a Wal asian model. All hese de iciencies ob iously a ise om he ailu e o he Wal- asian heo y o con ain a ich enough desc ip ion o he p ocess o exchange. In Clowe 's wo ds: .. he e exis s no accep ed o accep able mic oeconomic o mula ion o he heo y o an economy in which money plays an essen ial ole as a means o paymen s" (Clowe y 1971). Consequen ly, he mic o ounda ions o mone a y heo y ha e no ye been laid (Hahn, 1973 a). The na u al place o s a is by aking Clowe 's claim ha money has some hing o do wi h he ac i i y o exchange, and in ac many mone a y heo is s conside ba gaining and exchange o be he key elemen s in desc ibing a mone a y economy.1 The cen al ac o a mone a y economy is ha goods a e no aded o goods. Going om 1 An app oach dealing mo e di ec ly wi h he ansac ion aspec s o money is he Baumol/Tobin in en o y heo e ic amewo k. Al hough he heo y ocuses explici a en ion on he cos s o exchanging bonds and money, i igno es he cos s o exchanging money o commodi ies (Feige and Pa kin, 1971). OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/ccm.9.1.70 | Gene a ed on 2023-01-16 13:33:08 The Mic o ounda ions o Mone a y Theo y 73 a ba e exchange sys em o a mone a y exchange sys em in ol es a change in he exchange echnology (Hi shlei e , 1973): Goods a e aded (sold) o money and money is aded o (buys) goods (Clowe , 1967). The ask hen is o w i e ou a gene al equilib ium model which embodies his aspec o a mone a y economy. The ob ious al e na i e o he adi ional app oach is o link he se ices o money di ec ly wi h exchange ac i i ies which equi es ha exchange ac i i ies be cha ac e ized mo e p ecisely han is cus oma y in es ablished heo y. A a mo e undamen al ask is o disco e condi ions which will ensu e he es ablishmen o a mone a y economy. In ac ual economies, we obse e ha he use o money is almos uni e sal. To he casual empi icis his would seem o be simply because mone a y exchange is mo e e icien o mo e con enien han ba e . F om he iewpoin o he heo is , howe e , he in e es ing p oblem is o p o ide a mo e di ec way o e alua e he e iciency implica ions o a mone a y pa - e n o ade.2 Ag eemen on he need o eplacing he Wal asian ounda ion has no ye led o ag eemen on how i should be eplaced. I is un- o una ely e y much easie o say whe e he heo y should go om he e han o ge i o go he e. Money is used in ansac ions — one buys goods wi h i . I should hen be a modes ex ension o ou ba e heo ies o allow money o en e he ansac ion p ocess. Bu in he A ow/Deb e wo ld i is e y di icul o see how o when ansac ions as such ake place. The usual in e p e a ion o he a onnemen p ocess is ha i is conduc ed by one cen alized auc ionee who unc ions a ze o cos o es ablish ma ke clea ing p ices (A ow/Hahn, 1971; Uzawa, 1960). The p oo o he exis ence o equilib ium assu es us ha he e is a se o p ices ha he Wal asian auc ionee could call ou such ha a hose p ices he sum o excess demands and supplies would be nonposi i e. Tha is eally all i ells us. In he A ow/Deb eu model i is no clea how ade ac ually akes place. The s anda d s o y o exchange in he model is oughly his: he auc ionee announces equilib ium p ices (which ha e been p e iously 2 The common o media o exchange sugges s a wo old p oblem: Fi s , wha economic gains, i any, acc ue om use o a gene al medium o exchange o e and abo e hose acc uing om di ec ading. Second, how ha e ce - ain commodi ies come o be exal ed in o gene al media o exchange? I is p ima ily o he i s ques ion ha he wo k e iewed in his pape is ad- d essed. OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/ccm.9.1.70 | Gene a ed on 2023-01-16 13:33:08 74 No be Hen schel de e mined) o each and e e y commodi y, all ansac o s go o a cen al ma ke place and deli e he e hei excess supplies; hey ca y away om he ma ke place hei excess demands; since he p ices a e equilib ium p ices, he e is no unsa is ied excess demand. Bo h p oces- ses (i. e., he p ocess o ba gaining and o exchange) a e assumed o ope a e independen ly om he main pa o he equilib ium analysis which consis s o he maximizing beha iou o i ms and households subjec o pa ame ic p ices. Ye , wha is he iew o ansac ions p esen ed he e? So a as one can ell, he only ansac ions consis in deli e ing goods o o emo ing goods om some cen ally loca ed wa ehouse. Buye s (mo e p ope ly, demande s) may ne e mee selle s (supplie s) because indi iduals do no con on each o he bu he (impe sonal) "ma ke ". Su ely, in a model whe e ansac o s ne e mee he e is no ole o a medium o exchange passing be ween hem.3 Fu he mo e, he e is no unce ain y ega ding p ices o he eliabili y o con ac s, and so no eason o ade o ake place o he han once and o all a he ou se o he economy. Hence, he e is no need o a s o e o alue. In he A ow! Deb eu model one and only one o he h ee classical oles o money comes in o play: uni o accoun which is, by assump ion, no a com- modi y in he economy. Thus, he A ow!Deb eu model canno easily be made o accommoda e he p ocess o exchange. I is he pu pose o his pape o p o ide a su ey o he wo k ha has been done o lay he ounda ions o mone a y heo y. Mos o he wo k unde e iew is conce ned wi h how he p ocess o ansac ion and money as medium o exchange can be meaning ully in oduced in o a pu e exchange gene al equilib ium model, and he di e ence i makes o he esul s o he model. Basically, he e ha e been wo app oaches o his p oblem. One is o no e ha he essen ial cha ac e is ic o he p ocess o exchange is ha i is cos ly because i abso bs esou ces. Money en e s i as a de ice o p omo e he echnical e iciency o he p ocess by educing cos s. This is 3 Paymen o goods seems a concep almos absen om gene al equilib- ium heo y. I is only equi ed he e ha he alue o goods demanded equal he alue o goods supplies, bu he e is no equi emen ha he supplie o goods demanded be he ecipien o goods supplied. The only paymen o goods consis s o an addi ion o he selle 's budge and a subs ac ion om he buye 's. These budge s seem o exis mainly in he memo ies o eco ds o he agen s in ques ion (Os oy, 1973, see Sec ion 3 below). OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/ccm.9.1.70 | Gene a ed on 2023-01-16 13:33:08 The Mic o ounda ions o Mone a y Theo y 75 he s a ing poin o he li e a u e on ansac ions cos s which adjoins a ansac ions echnology o a pu e exchange gene al equilib ium model CFoley, 1970; Hahn, 1971, 1973 b; S a e , 1973; Ku z, 1974 a, b).4 An al e na i e app oadi is, wi hou speci ying he unde lying cos s o ansac ion, o analyse models whe e exchange is subjec o a ious ules. Examples a e: commodi y A can be aded agains commodi y B bu no agains commodi y C (Clowe , 1967); o ade can ake place only be ween ade s who ha e a double coincidence o wan s (S a , 1970, 1972); o exchange is es ic ed o pai s o ade s (Os oy, 1973; Os oy and S a , 1973; Feldman, 1973). The main i ue o his ap- p oach is ha i emphasizes and seeks o explain he obse a ion ha mos exchange in mode n ma ke economies is o desi ed goods and se ices o a single in e media y good. Ins ead o jus assuming ha money enla ges he se o easible ansac ions, as he wo k pu suing he i s app oach does, a de ailed compa ison be ween ba e and mone a y exchange is gi en. The poin made he e is ha i ies o p esen a a ionale o which o ganisa ional s uc u e o he economy will eme ge. The plan o he pape will be as ollows. In Sec ion 2 we shall e iew he i s app oach unde he heading "Single and Mul i-Ma ke Models wi h T ansac ions Cos s". Sec ion 3 will discuss he second app oach unde "Models o Ba e and Mone a y Exchange". The las sec ion will poin ou some di ec ions o u u e wo k. I should be no ed ha much o he wo k e iewed in his pape is a a ai ly high echnical le el, and we shall y o explain hese ideas in a non- echnical ashion. 4 A ai ly di e en app oach wi h ansac ions cos s is pu sued by Niehans (1969, 1971), Kami (1973) and B unne and Mel ze (1971). This wo k is di ec ed mo e owa ds he p oblem o why and how he use o a gene ally accep ed medium o exchange de eloped in he i s place. Niehans and Kami in es iga ed he implica ios o ansac ions cos s o he ading decisions made by u ili y-maximizing indi iduals, and hey conclude ha indi iduals will choose he mone a y pa e n o ade i he cos s o doing so a e su icien ly less han he cos s associa ed wi h o he pa e ns o ade. They ha e shown ha , unde ce ain condi ions, some commodi ies wi h ela i ely low ansac- ions cos s may eme ge as media o exchange as a esul o op imiza ion p o- cesses o minimize ansac ions cos s. Howe e , hey o e no heo y o ex- plain he ela i e cos s o al e na i e ading pa e ns. Also, i is likely ha he de elopmen o money canno be se led by ela i e ansac ions cos s a a poin in ime wi hin a s a ic model unde ce ain y; i mus be seen as a dynamic p ocess, whe e unce ain y and impe ec in o ma ion come in o play (see, o example, B unne !Mel ze , 1971, and Sec ion 3 below). OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/ccm.9.1.70 | Gene a ed on 2023-01-16 13:33:08 76 No be Hen schel II. Single and Mul i-Ma ke Models wi h T ansac ions Cos s The p oblem o ansac ions cos s is e y emp ing. This is a concep which can be made p ecise wi h compa a i e ease. T ansac ions cos s en e in an in ui i ely appealing and essen ially classical ashion he analysis o a ma ke wi h money: In he s anda d A ow!Deb eu heo y, any edis ibu ion o commodi ies which p ese es hei o als is easible. In o his model we can in oduce he p oblems o exchange as a kind o anspo cos o ge ing om one bundle o goods o ano he . We may hen eason ha mone a y exchange ep esen s a leas cos ne wo k, so ha wi hou he money commodi y he se o easible ansac ions mus sh ink. Un o una ely, he meaning o ansac ions cos s a ies om w i e o w i e . The e m is a ca chall o di e en i ems (Hi shlei e , 1973): anspo a ion, inspec ion and legal ans e cos s; cos s o acqui ing o dissemina ing in o ma ion abou he p ices and cha ac e is ics o goods; cos s o sea ching o ading pa ne s; cos s o checking ha people ope a e wi hin hei budge cons ain ;5 cos s o he â onnemen p ocess o es ablishing equilib ium p ices and ades. Conside ing a gene al equilib ium amewo k, he e a e good easons o classi ying hese cos s in o wo g oups: (a) cos s o se ing up ma ke s, es ablishing and calling equilib ium p ices, and (b) cos s o ac ually a anging ades a hese equilib ium p ices. I is a guable ha he i s class o cos s is o mo e in e es o economis s, bu he e a e a numbe o p oblems in ol ed in modelling such cos s: he e is some s ochas ic elemen in cos s o sea ch, and he se -up na u e o hese cos s ine i ably in oduces inc easing e u ns o scale.6 Fo mos o he models discussed below i is only he second class o ansac ions cos s ha can be handled, since i is usually as- sumed ha equilib ium p ices a e known and announced a he begin- ning o he model. Gene ally speaking, he e a e wo ways o inco po a ing ansac ions cos s in o gene al equilib ium models. The i s is o assume ha in- di iduals hemsel es di ec ly employ he esou ces equi ed o ansac- 5 Fo a de ailed discussion o hese "in o ma ion cos s" see Sec ion 3 below. 6 Ano he assump ion common o mos models discussed below is ha ansac ion echnologies a e con ex se s, ha means hey show non-inc easing e u ns o scale. Bu s anda d echniques a e a ailable o ge a ound his (Hel- le , 1972; Helle and S a , 1973). OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/ccm.9.1.70 | Gene a ed on 2023-01-16 13:33:08 The Mic o ounda ions o Mone a y Theo y 77 ions. Each indi idual agen is assumed o ha e a se o easible ansac- ions ac i i ies, i s ansac ions echnology, which speci ies he esou ces i will need o ca y ou planned pu chases and sales. (The ansac ions echnology se s ha e all he usual p ope ies o p oduc ion possibili y se s in he A ow!Deb eu wo ld.) The second poin o iew is ha ansac ions esou ces a e employed by some in e media y. One hen hinks o he ansac ions echnology se o he in e media y. Le us now u n o he simples ea men o ansac ions cos s in gene al equilib ium heo y which is gi en by Foley (1970). Foley's model is ai ly close o ha o A ow/Deb eu, wi h a single ma ke able o deal in all commodi ies. Howe e , ansac ions ha e o be ca - ied ou h ough in e media ies who buy goods om some households and sell hem o o he s. The ma gin be ween buying and selling p ices has o co e he cos s o esou ces used in ansac ing. An equilib ium exis s in he economy and also i will be e icien .7 Ku z (1974 a) has also p esen ed a single ma ke model o ansac- ions cos s, and his esul s ag ee b oadly wi h hose o Foley. Ku z, howe e , assumes ha i is indi iduals who di ec ly employ esou ces equi ed o ansac ions a he han in e media ies. Bu while his wo k cla i ies some o he claims on behal o money by e e ence o he wo k i does in acili a ing exchange, i is su p ising how di icul i is o ge money in o a model wi h ansac ions cos s. Foley does no in oduce i , and Ku z succeeds only pa ially a e making some he oic assump ions abou money: i is a he a hal -used appendage o he model. As nei he model p o ides a ull explana- ion o he exis ence o money, he e is no poin in commen ing on hem in any de ail. Thus, all ha has been demons a ed in he single ma ke models is ha many o he ma ke s assumed o exis by A ow/Deb eu may no ope a e. Fu he mo e, hese models canno ex- plain why ade occu s sequen ially o in a se ies o exchanges be ween pai s o ade s a he han wi h a ma ke . To ind a mo e sa is ac o y ea men o hese phenomena we u n o he s udy o mul i-ma ke models. The simila models o Hahn (1971, 7 Pa e o e iciency now has o be de ined ela i e o bo h he ansac ions echnology and he dis ibu ion o ini ial endowmen s. (In he A ow/Deb eu wo ld, Pa e o e iciency is de ined ela i e o agg ega e ini ial endowmen s). This has impo an implica ions o wel a e economics, bu i would ake us oo a a ield o commen on he complica ions ha a ise along his ou e o heo e ical inqui y. OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/ccm.9.1.70 | Gene a ed on 2023-01-16 13:33:08 84 No be Hen sdiel This exchange in e p e a ion is jus ano he way o ega ding he mul- i-ma ke model o he p e ious sec ion. I we hink o exchange aking place in a se ies o many wo-sided ades be ween agen s, in e ms o he mul i-ma ke model, his would mean ha e e y pai o ade s cons i u es a sepa a e ma ke — he e a e as many ma ke s as he e a e pai s o ade s.16 Consequen ly, he c ucial ques ion o his app oach is: why does ex- change no ake place in one la ge ma ke a he han in he many wo-sided exchanges we obse e? A en a i e answe may be ha he e a e e y signi ican cos s associa ed wi h b inging la ge numbe s o ansac o s oge he . These cos s a e so high as o make i p e e able o ha e la ge — and p esumably also cos ly — lows o goods ac ing as media o exchange a he han incu he cos s o b inging people o- ge he . One possible and mos di ec way o in es iga e his poin is in a model con aining bo h bila e al exchange and he s anda d gene al equilib ium model as special cases. One would hope ha om he model he e is he impo an ea u e o a mone a y economy ha i allows specialisa- ion which makes he ex ension o p oduc ion di icul (Hahny 1973 a). Second- ly, explaining he eme gence o a mone a y economy ou o he decen alized decisions o u ili y maximizing agen s, i may well be possible o ge com- modi y media o exchange o come om a model o ba e exchange, bu ha d o ge ia money in a na u al way. This is so because, his o ically speaking, he unc ion o money as a s o e o alue, medium o exchange, and uni o accoun de eloped wi h he eme gence o a speci ic commodi y like gold which was gene ally accep ed o exchange pu poses. Bu his his o ical ac became possible as a esul o he ac ha hose commodi ies had an in insic u ili y o consump ion pu poses and ha was he eason why hey had any alue o begin wi h. The ac o es ablishing money as money wi hou an in- insic alue is undamen ally an ac o social choice — ia money ac s in a social sys em as a public good. No simple decen alised mechanism is known o explain how such a social con ac de elops. I would ake an in incible belie in he "in isible hand" o make he po en ial op imali y o mone a y exdiange in o a a ionale o i s p e alence. 16 Ano he concep ion o ba e exchange is o a ading-pos pa e n o ade — he e is a dis inc ma ke o each pai o goods o be aded agains one ano he . This was o iginally sugges ed by Wal as in his amous heo y o a onnemen when he was ying o po ay he ac ual wo king o he p icing and exdiange p ocesses in a decen alized sys em o ma ke s. (Wal as, 1954; Ja e, 1967; Howi y 1973). — Recen ly, he app oach o a ading pos -pa - e n o ade has been pu sued by Niekans (1971). Fo a c i ical in es iga ion o he analy ical consequences see Veendo p (1970) and Howi (1973). OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/ccm.9.1.70 | Gene a ed on 2023-01-16 13:33:08 The Mic o ounda ions o Mone a y Theo y 85 o mul ila e al exchange we migh well seek an explana ion o why mos ansac ions ake place bila e ally using a medium o exchange. S a (1970, 1972) has ela ed hese ideas o he amilia discussion o ba e in e ms o he double coincidence o wan s: He in es iga es he classical poin o iew ha he ole o money is o o e come he p oblems o exchange which de i e om a ailu e o double coincidence o wan s. Suppose we ha e an equilib ium o he mul i-ma ke model which is said o exis when he sum o indi idual excess demands is ze o o each commodi y. Ne e heless, om he indi iduals' poin o iew, hey a e disequilib ium as long as no all indi idual excess demands a e ze o o each commodi y. S a hen desc ibes an equilib ium se o ades as mono onically excess demand diminishing i o e e y indi idual, e e y ma ke , and e e y commodi y, he sign o he ade in a com- modi y is he same as he sign o excess demand o ha commodi y. This means ha any commodi y en e ing an exchange, i pu chased, is no esold, and i sold, is no epu chased, and in e e y ma ke , indi- iduals a e only buying wha hey wan o consume inally, and selling wha hey wan o ge id o . Clea ly his is pa o wha is usually mean by double coincidence o wan s. The o he pa is ha indi id- uals mus balance hei books ma ke by ma ke . These condi ions im- ply ha ansac o s a e able o ind swaps o commodi ies which exac - ly mee hei equi emen s, wi hou any need o media ing exchanges. S a has shown ha imposing budge balancing ma ke by ma ke leads o ine iciency.17 To es o e e iciency i may be ad an ageous o use pai wise ade wi h a medium o exchange. In ac , S a shows ha he in oduc ion o money allows he economy o each a compe i i e equilib ium ia a ini e se ies o bila e al ades cons ained by a quid p o quo o bila e al balance equi emen which could o he wise be achie ed only as a many-side ade. Howe e , one may be scep ical as o he ex en o which his model illumina es he ole o money. The main weakness o his app oach is ha he need o double coincidence o wan s is aken as gi en, wi h- ou in es iga ion o unde lying causes. Consequen ly, he c ucial ques- ion emains: I he imposi ion o budge cons ain s ma ke by ma ke leads o ine iciency why does he economy no jus use a single budge 17 As men ioned abo e, he exchange in e p e a ion is jus ano he way o ega ding he mul i-ma ke model o sec ion 2. The e o e all he esul s con- ce ning e iciency and inessen iali y ca y o e . OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/ccm.9.1.70 | Gene a ed on 2023-01-16 13:33:08 86 No be Hen schel cons ain ? The answe seems o be ha i is cheape , in some sense, o ope a e wi h many budge cons ains because he amoun o eco d keeping could be smalle unde such a sys em. To cla i y he issue a s ake, i may be use ul o app oach he p oblem in a sligh ly di e en way. In he p e ious sec ion we saw ha o mal no ice has been aken o he ac ha he aluable exchange se ice en- de ed by he auc ionee a e cos ly o p o ide. We lea n om hese s ud- ies ha cos ly exchange can be in oduced wi hou gi ing up he as- sump ion ha exchange is coo dina ed by a cen al agency — an auc- ionee who cha ges o his se ices. The in oduc ion o ansac ions cos s in an equilib ium con ex does no necessa ily lead o a mo i e o he eplacemen o di ec simul aneous ma ke clea ing by indi ec ans- ac ions in ol ing a medium o exchange. Fo example, we may lea n om Niehans (1971) ha e en when ex- change is es ic ed o pai s i need no be comple ely decen alized. The selec ion o a leas cos bila e al ading ne wo k can be made by a cen- al planne who sol es a complica ed p og amming p oblem. A simila di icul y occu s in S a (1970) whe e indi iduals choose op imal se s o bila e al ansac ions bu equi e a cen al agency o hook hem o- ge he . Howe e , acco ding o se e al au ho s18 i is only when he exchange p ocess is decen alized ha he ole o money can be unde s ood. I can be a gued ha one o he social bene i s a ising om he use o a commonly accep ed medium o exchange is ha i allows he ba gaining and exchange p ocess o p oceed in a decen alized ashion.19 Once we gi e up he ask o a cen alized agency and concen a e on he logis ics o mo e disagg ega ed ading a angemen s, mone a y exchange be- comes explicable. S a 's conclusion ha imposing budge cons ain s ma ke by ma ke leads o ine iciency is jus ano he way o saying ha he Wal asian 18 Clowe (1971), Veendo p (1970), S a (1972), Howi (1973), Os oy (1973), Os oy and S a (1973). 10 An economic sys em is desc ibed as decen alized i i in ol es indi idual agen s making decisions based on a ai ly small body o uni e sally com- munica ed in o ma ion (i. e. p ices) and on in o ma ion which he agen s hem- sel es may be supposed o possess (i. e. indi idual as es and endowmen s and, he pai 's ading his o y). — A cen alized sys em is one in which he ading decision depends on he ading his o ies o e e yone in he economy, no only hose o he wo ade s in a pai . OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/ccm.9.1.70 | Gene a ed on 2023-01-16 13:33:08 The Mic o ounda ions o Mone a y Theo y 87 (ba e ) sys em canno be decen alized.20 Bea ing in mind he indings o Clowe (1967) and Hahn (1965) poin ed ou in he in oduc ion o his pape , bo h Wal as and mode n heo y (which has no gone much u he ) ailed o desc ibe a decen alized exchange p ocess because hey omi ed o limi he possibili ies o exchange excep h ough he one amilia budge cons ain . I we ha e no cen al exchange agency, exchange is a do-i -you sel a ai . In he ac ual ading p ocess indi iduals do no exchange wi h " he ma ke "; hey exchange wi h each o he and hey ha e o sea ch o a ading pa ne . This conside a ion is he basis upon which he au ho s men ioned abo e cons uc an a gumen o mone a y exchange. Ope a ing a decen alized sys em wi h many budge cons ains and a medium o exchange could be cheape , in some sense, han ope a ing a cen alized sys em wi h a single budge cons ain . The di icul y un in o he e is ha hough one can ell plausible s o ies abou e iciency, one has o look o a mo e di ec way o examining he cos s o ope a - ing he al e na i e sys ems. Os oy (1973) and Os oy/S a (1973) ha e p o ided such a me hod. To ix ideas, Os oy and S a no e ha when a sequen ial bila e al ading a angemen is in oduced in o he desc ip ion o a Wal asian exchange economy, he issue o he exis ence o a compe i i e equilib- ium alloca ion can no longe be di o ced om he dynamic p oblem o execu ion. The e o e, hey p opose a model o a ading economy in which indi iduals ha e he oppo uni y o exchange, bila e ally, in each o se e al pe iods — he numbe o pe iods o be de e mined by he numbe o indi iduals as he minimum necessa y o duplica e any con- cei able mul ila e al exchange by a sequence o bila e al exchanges. The hypo hesis o he ading p ocess is as ollows: The Wal asian auc ionee announces equilib ium p ices bu lea es he expedi ion o 20 See Ja e (1967), Walke (1970) and Howi (1973) o a simila con- clusion on he de iciencies o Wal as' heo y o exchange. — The undamen al weakness o he Wal asian sys em ha i canno be decen alized has been shown explici ly by Veendo p (1970) and Howi (1973). When equilib ium is de ined as he equali y o o al o e s and o al demands o each commodi y, his de ini ion clea ly lea es open he possibili y ha equilib ium migh no be es ablished in all n(n— l)/2 ading pos s. The e o e, he ba gaining p ocess mus be in e p e ed as a comple ely cen alized p ocess, guided by a cen al coo dina o in o de o i o con e ge on a se o consis en exchange plans. A simila esul has been disco e ed by Os oy (1973). P oposi ion 5) and Os oy/S a (1973, Theo em 2). OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/ccm.9.1.70 | Gene a ed on 2023-01-16 13:33:08 88 No be Hen sdiel ades o he indi iduals hemsel es. The common knowledge o p ices is used o de ine quid p o quo in exchange (i. e. he deli e y o goods o equal alue, o bila e al balance).21 Os oy and S a hen ask he ollowing ques ion: suppose du ing a uni in e al o ime, an indi idual mee s wi h only one o he so ha du ing he in e al an indi idual's ades a e limi ed by his own and his ading pa ne 's cu en endow- men s. When one pai mee s, o he pai s a e also making con ac , so ha exchange occu s as a sequence o simul aneous bila e al ades. When n is he numbe o indi iduals, he e a e nil ma ke s ope a ing in e e y ime in e al. Call such an ope a ion a ound, hen wha is he ewes numbe o ound ha will be needed o exchange all he excess demands and supplies speci ied in he equilib ium? Answe ing his ques ion, he au ho s show he ollowing: I each in- di idual is ully in o med abou he excess demands and supplies o all indi iduals, imposing bila e al (budge ) balance in each pe iod leads o a g ea e numbe o ounds han wi hou imposing his es ic ion. We ge he usual ine iciency esul — he ou come wi h many cons ain s is less e icien han he single budge cons ain equi alen . Suppose now ha we limi he in o ma ion, so ha a each ound in- di iduals a e equi ed o make exchange while in doub as o he ex- cess demands and supplies o hei ading pa ne . Then i u ns ou ha es ic ing in o ma ion abou ading oppo uni ies leads o using mo e ounds o a ain he se o equilib ium ades. In o he wo ds, he equilib ium in he case o impe ec in o ma ion is ine icien in he sense ha he e is a Pa e o p e e able ou come which could be achie ed wi h he same esou ces i in o ma ion we e pe ec .22 Again i is s ill as e no o impose ound by ound budge balancing. 21 As we shall see, wi hou some equi emen o his so he e is no poin in discussing media o exchange, inasmuch as he e is no need o pay he selle o goods pu chased. The bila e al balance condi ion is me ely he abs ac ion o he ob ious ac e i ied by casual empi icism ha when one buys some hing, one pays he selle o i . — The o igin o his es ic ion is s a egic. I will be shown ha wi hou a bila e al balance cons ain , in- di iduals would no be e ec i ely p e en ed om iola ing hei o e all budge cons ain s. 22 Thus, he e is a ade-o be ween ime and in o ma ion in adiie ing ull execu ion: The numbe o ounds is a measu e o he alue o esou ces los h ough lack o in o ma ion. Unless in o ma ion is qui e de ailed, o he numbe o indi iduals (small, he /compe i i e equilib ium alloca ion o esou ces will be una ainable. — I is wo h no ing ha no explici accoun is aken o he physical o psychic cos s o exchange. The analysis is abou OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/ccm.9.1.70 | Gene a ed on 2023-01-16 13:33:08 The Mic o ounda ions o Mone a y Theo y 89 The ques ion emains, why use his de ice a all? The answe is e- la i ely s aigh o wa d. Once he e is incomple e in o ma ion abou wha he equilib ium excess demands and supplies a e, and no bila e al balance equi emen a any ound, one canno gene ally assume ha people ell he u h: hey ha e a s ong incen i e o o e s a e hei demands. The esul is ha a he end o he exchange p ocess he o e - all budge balance will be iola ed. Wi h limi ed in o ma ion, he only way o ensu ing ha indi iduals mee hei o e all budge cons ain is o impose bila e al balance ound by ound. Howe e , he e is ano he way o en o cing budge balance wi hou imposing bila e al balance. This can be achie ed by he in oduc ion o a mone a y paymen s a angemen — a cen alized eco d keepe who o - ces ansac o s o ac u h ully.23 Mo eo e , his de ice o a kind o ans e c edi sys em ensu es ha he equilib ium se o ades can be ea- ched once mo e wi h ewe ounds. In o he wo ds, money can be used o economize on in o ma ion cos s24 (allowing a Pa e o supe io ou come) as a ans e able signalling de ice h ough which he alue o one's pas con ibu ion is eco ded. The sole pu pose o ade in he money com- modi y is o es ablish a coun ing de ice o ensu e ha he sum o addi- ions o and sub ac ions om he alue o one's holdings du ing he cou se o ade is ze o. Tha he de ice is embodied in a angible com- modi y is inessen ial.25 These indings a e impo an o i also means cos ly ade only in he sense ha all bila e al ades incu lowe cos s han mul ila e al ones, and he single c i e ion is he numbe o ounds i akes o accomplish he ask o execu ing all exchanges. 23 The mone a y au ho i y's unc ion is o collec and colla e he bi s o in o ma ion indi iduals ha e abou each o he 's ading his o ies. Each will equi e his ading pa ne o w i e a signed s a emen , a cheque, indica ing he amoun by which he pa ne 's pu chases exceed his sales. This eco d is o wa ded o he mone a y au ho i y who e ises indi idual accoun s on he basis o his new in o ma ion. O cou se, he e is e e y incen i e o selle s o equi e and deposi his in o ma ion wi h he mone a y au ho i y; o he wise, one would no ecei e c edi o sales and so ha e o cu back on pu chases. C edi balances wi h he mone a y au ho i y a e he money o he ma ke . Howe e , his kind o money is no simply a uni o accoun . 24 I we de ine ansac ions cos s as hose losses a ising om di e ences in in o ma ion, we may well say ha money educes ansac ions cos s. 25 Os oy and S a poin ou e y clea ly ha he essen ial ea u e o mone a y exchange has i s o igin in he ading a angemen and no in he na u e o he money commodi y. They choose o in oduce a mone a y au ho i y and bookkeeping en ies as a kind o ideal mone a y a angemen because he eco d-keeping unc ion o money is concep ually dis inc om OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/ccm.9.1.70 | Gene a ed on 2023-01-16 13:33:08 90 No be Hen sdiel ha he s o e o alue and means o paymen unc ions o money a e insepa able.26 F om his analysis we ge an in e es ing and elabo a e s uc u e o mone a y exchange. I is wo h bea ing in mind ha he models discussed in he p e ious sec ion in oduce he p oblems o ex- change as a kind o anspo cos ge ing om one bundle o goods o ano he . One may hen eason ha mone a y exchange ep esen s a leas cos ne wo k, so ha wi hou he money commodi y he se o easible ansac ions mus sh ink. Os oy and S a a gue ha while his may be adequa e me apho ically, i misses he poin : Mone a y exchange does no enla ge he se o easible ansac ions; i me ely enables ades, which mus be easible in he i s place o be ealised. Also we ha e seen in Sec ion 2 ha one o he ou s anding ques ions in he in eg a ion o mone a y and alue heo y is wha suppo s he p ice o a medium o exchange in equilib ium. A en ion was gi en o his quanda y which accompanies any gene al equilib ium cons uc ion in ol ing pape money, and a ious condi ions ha e been sugges ed o suppo he p ice o money in equilib ium. The ad hoc na u e o hese cons uc s sugges s ha he p oblem o in eg a ing mone a y and alue heo y is no necessa ily equi alen o he demons a ion o a posi i e p ice o money. Os oy and S a he e o e, pu suing he iew aken by Clowe (1967), ask a di e en ques ion: Fo a commodi y wi h po- si i e alue, a e he e any condi ions unde which i could be use ully employed as a medium o exchange? In hei model, Theo em 4 answe s a i ma i ely using a ading ule which assigns a unique, asymme ic ole o he money commodi y: As long as he e is a gene ally accep- able, uni e sally held medium o exchange, no communica ion o mas- he p ope ies o he commodi ies aded. — O cou se, o unde s and a pa icula mone a y a angemen , i becomes a ma e o ecognizing a mini- mum cos me hod o imposing budge balance. In a socie y un amilia wi h double en y bookkeeping, bila e al balance migh be he only means o ensu ing ha indi iduals keep wi hin hei o e all budge cons ain and one would ha e o look o a minimum cos me hod o imposing bila e al balance. Then one migh well choose as a me hod o en o cing budge balance a commodi y which is mos po able, du able, di isible and ecog- nizable (see B unne and Mel ze , 1971, who a gue ha he ad an ages o money ha e hei o igin in he p ope ies o he money commodi y). 26 Essen ially, money is a eco d o pas ansac ions and o he igh o conduc u u e ansac ions. This is he basis o he unc ions o money as a s o e o alue and a medium o exchange. I would no ul il he la e unc- ion unless i was a eco d which las ed o e ime i. e. unless i ul illed he o me . OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/ccm.9.1.70 | Gene a ed on 2023-01-16 13:33:08 The Mic o ounda ions o Mone a y Theo y 91 si e amoun s o da a is necessa y. Each ade me ely consis s in he ex- change o a desi ed commodi y o he medium o exchange. All one need know abou ading pa ne s is ha hey accep he medium o exchange. The in o ma ional equi emen s o ba e imply he need o a cen al coo dina ion o ade; he unc ion o a common medium o exchange is o allow decen aliza ion o he ading p ocess. Ye he e is he e y s ong assump ion ha equilib ium p ices ha e been es ablished and a e known a he ou se o he model. Admi edly, one may well a gue ha i we canno ind a ole o money when equi- lib ium p ices a e known, we shall no ind one when hey a e un- known (Os oy, 1973). Recen ly, howe e , Feldman (1973) de eloped a model o exchange in which no p ices a e known, and in which ade s ha ing no in o - ma ion o subjec i e p obabili ies abou ading oppo uni ies, only make exchanges when hey can make hemsel es be e (o no wo se) o by so doing. T ansac o s a e duly g oping in he da k; ne e heless Feld- man shows ha unde gene al condi ions hei myopic ading will lead o a pai wise op imal alloca ion, and ha , i he e is a uni e sally held money commodi y, ha pai wise op imal alloca ion will also be Pa e o op imal. In o he wo ds, Feldman demons a es ha he exis ence o a good which e e yone desi es and holds, such as money, gua an ees ha bila e al ading can exhaus all oppo uni ies o Pa e o-imp o emen s in he alloca ion o esou ces. While he e a e some unsa is ac o y elemen s in hese ecen s udies o S a , Os oy and Feldman, ne e heless hey poin ou how impo - an a money commodi y migh be. Rep esen ing he mos elabo a e compa ison o he e iciency o mone a y exchange o e o he kinds o ading a angemen s, any igo ous heo y o money will ha e o pay a en ion o he p oblems hey aise. Wha hei a gumen s sugges is ha he e a e good easons o app oach mone a y exchange as a e lec- ion o impe ec in o ma ion abou la ge numbe s o ansac o s in a decen alized exchange sys em. The e may be a e y subs an ial heo y o he ole o money based on cos s o sea ch.27 Such a heo y would depend essen ially on he echnology o sea ch and communica ion mech- anisms by which o e s o buy and sell a e made. I is plain ha he use o a p ice sys em and he use o money a e inex icably linked up wi h 27 Ano he example o wha can be achie ed by explo ing he in e p e a- ion o money as a medium o communica ion is B unne and Mel ze (1971). OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/ccm.9.1.70 | Gene a ed on 2023-01-16 13:33:08 92 No be Hen schel he ansmission o in o ma ion be ween agen s: hei ole is o con- ibu e o he coo dina ion o economic ac i i ies whe e in o ma ion is impe ec and cos ly. This poin has been emphasized e y o cibly by Clowe (1965) and Leijonhu ud (1968, 1973). IV. Conclusion The mic o ounda ions o money do cons i u e a pe ennially unse led a ea o economic analysis. F om Wal as on, he e has been an a emp o g apple wi h he salien ea u es o a mone a y economy. Recen ly, mone a is s ha e eached an ag eemen ha he essen ial elemen s o mone a y heo y a e missing om he Wal asian amewo k. I one looks back a he wo k e iewed in his pape one sees ha he common elemen in i is a ecogni ion ha Wal asian heo y desc ibes he ope a ion o pe ec , ic ionless ma ke s whe e exchange ac i i ies play no essen ial ole. The discussion on he modi ica ion o he analysis when a medium o exchange is p esen owes i s poin o depa u e o Clowe . Wo k owa ds eplacemen o he Wal asian ounda ions o mone a y heo y has ocused on he in oduc ion o he gene al equilib ium amewo k o sys ema ic impe ec ions and ailu es o ma ke s. These include in- ac i i y o ma ke s, ansac ions cos s, incomple e in o ma ion, cos s o acqui ing in o ma ion, sequen ial ma ke s. The hope is ha an unde - s anding o he di icul ies in execu ing ade will lead o he de elop- men o a heo y o de ices o acili a ing ade, including a gene al equilib ium heo y o money and inance. In his pape we ha e ied o e iew pa o he wo k which has been done o ob ain ep esen a- ions o an economy in which money is essen ial. Gi en he simplici y o he models we ha e discussed i would be w ong o p e end ha hey ep esen any hing mo e han a beginning o a p ope in eg a ion o mone a y and alue heo y. Wo k owa ds a p ope ly o mula ed mone a y heo y has p oceeded in many di e- en di ec ions. The esul has been a a ie y o heo e ical app oaches, and i is no clea whe e he amily o s udies should go. As Hahn no es, i is likely ha in e ospec i will be seen ha some alse s eps ha e been aken. Fo example, i we pu sue comple ely he app oach o Hahn and o he s he esul is a heo y o a mone a y economy o e ime in which money en e s only as a ze o ansac ions cos s o e o alue. Money is signi ican o e ime bu he e is no ole o money a a poin in ime. OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/ccm.9.1.70 | Gene a ed on 2023-01-16 13:33:08 The Mic o ounda ions o Mone a y Theo y 93 Money will mo e us om one sequen ial equilib ium o he nex wi hou en e ing he wo kings o any single equilib ium. In o he wo ds, any p ope ly o mula ed mone a y heo y is expec ed o deal wi h non- essen ial economies. Con e sely, i we we e o ollow he sho ime a he han long ime app oach we would un in o co esponding di icul ies. I Os oy's un- damen al analysis we e ca ied h ough we should ha e a deep de ailed iew o an economy in equilib ium a a poin in ime wi h a clea iew o ansac ions and he economy's inancial sec o . Bu he e is li le eason o belie e ha his can ge us om one pe iod o he nex . To he ob ious sugges ion ha one ma y he wo app oaches yield- ing a long pe iod sequence o sho pe iod economies, he eply is ha his is wo h in es iga ing bu ha he app oaches a e so di e en one doub s ha he ma iage would las — one migh well end up wi h wo di e en moneys in he same economy, se ing he wo unc ions o medium o exchange and s o e o alue. One is emp ed, he e o e, o y some hing less ambi ious and in pa - icula o s udy he sho pe iod only. Bea ing in mind he desc ip ion o he models o Hahn and o he s, one is conce ned wi h an economy which is sequen ial and ye has announced p ices and no unce ain y. I would be a possible di ec ion o esea ch o elimina e hese un ealis ic es ic ions. This may be achie ed ei he by using he concep o em- po a y equilib ium and inco po a ing dep in o he G andmon /Younes model, o , al e na i ely by in oducing unce ain y in o he models o Hahn and o he s. Some o he di icul ies which now a ise ha e been explo ed by Radno (1972) and G een (1971, 1972). Also, he s uc u e o he Os oy!S a model sugges s app oaches o u he esea ch, o example, in oducing specializa ion in p oduc ion and exchange, making mone a y exchange e en mo e essen ial. Pe haps he mos impo an p oblem is ha any ca e ul analysis o economies whe e p ices a e o be de e mined by agen s in he economy in ol es conside a ion o p ice se ing beha iou ou o equiliu ium.28 28 The elling a gumen agains he sequen ial equilib ium (o mo ing equilib ium) ype o mone a y heo y is ha he heo y unde lying equilib ium analysis assumes ha ba gaining is no p oblem. Such an equilib ium analysis dicho omizes he p ocess o exchange and he p ocess o ba gaining. The ba gaining s a s a he beginning o each pe iod and con inues un il an equilib ium se o p ices is es ablished. Equilib ium ades occu only a e he ba gaining p ocess has nowhe e else o go. Such a heo y is misleading, OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/ccm.9.1.70 | Gene a ed on 2023-01-16 13:33:08 100 No be Hen schel conséquence que ous les p oblèmes d'in o ma ion e de coo dina ion ésul an de l'in e dépendance des ac i i és d'échange indi iduelles son éliminés de la dé ini ion. La héo ie adi ionnelle de l'équilib e n'explique en ou e pas pou - quoi les indi idus peu en acqué i a ec une uni é d'un bien dépou u de aleu (monnaie-papie ) une con ibu ion posi i e d'un bien «u ile». La onc- ion de la monnaie en an que moyen géné al d'échange n'es pas su isammen ondée dans la s uc u e du modèle. Comme en plus la même alloca ion d'équilib e peu ê e a ein e aussi bien a ec que sans l'aide de ansac ions in e médiai es, il n'y a qu'un pas à considé e ou es les ansac ions in e - médiai es posi i es comme dépou ues de onc ion. La héo ie ne épond inalemen pas à la ques ion, pou quoi s'es o mée en éali é l'o ganisa ion d'échange obse ée, ca dans ce e pe spec i e l'échange n'es pas conçu comme une ac i i é économique exigean des essou ces, c'es -à-di e qu'il n'exis e pas de choix en e di e ses o ganisa ions d'échange (Technologies de ans- ac ion). Pa an de ces considé a ions l'a icle en ques ion examine les élémen s es- sayan de modi ie le modèle de dépa insa is aisan su le plan de la héo ie des ansac ions: pa la p ise en considé a ion des coû s de ansac ion l'échange se laisse conce oi comme une ac i i é économique à l'occasion de laquelle le choix en e plusieu s oies d'échange de ien un p oblème de choix économique- men pe inen . Les coû s des ansac ions peu en al e na i emen ê e p is en considé a ion dans les pe spec i es sui an es: d'une pa on peu oc oye à chaque indi idu la double onc ion de consomme e d'échange ; mais d'au e pa on peu égalemen considé e isolémen de maniè e analy ique les deux ac i i és économiques de consomme e d'échange , d'où esso une jux apo- si ion d'un sec eu composé uniquemen de budge s ménage s e d'un sec eu composé uniquemen d'in e médiai es d'échange. Mais ce e pe spec i e pa aî o i peu de possibili és de dépasse éellemen le modèle de dépa dans la ques ion de l'a ec a ion des moyens d'échange. Ceci n'es o e que pa une au e pe spec i e, dans laquelle (abs ac ion ai e des coû s de ansac ion) pa la concep ion de l'échange en an qu'in e ac ion bila é ale la onc ion de moyen d'échange de la monnaie es ondée e jus i iée con o mémen à un modèle. OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/ccm.9.1.70 | Gene a ed on 2023-01-16 13:33:08