Abstract
This paper explores the domestic effects as well as the international transmission of financial innovation. The analysis is carried out in a cash-in-advance model with two currencies and tw o goods in which income velocity is variable because of inventory-type considerations in the determination of the demand for money. The discussion emphasizes the role of currency substitution, which occur s through the interaction between the two monies in affecting the tota l amount of time devoted to transaction activities. The role of cross-border transfers of seigniorage in determining the general equilibrium effects of financial innovation is discussed. Copyright 1993 by Ohio State University Press.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
