Is gold an efficient store of value?
The authors prove that the higher the ratio of consumption value to service value, the more suitable is the durable commodity to be money. Let us add that a typical durable commodity has both some consumption value (utility yielded at a point of consumption when it ``disappears as a smoke) and some service value (utility yielded on an account of its beauty (gold, jewelery) without getting dissipated. Next they show that if there is enough tobacco-like money at the beginning, then the equilibrium is efficient, under the assumption of a diminishing marginal utility to consuming tobacco, and that the marginal utility of tobacco is bounded from below. It is also demonstrated that if money is gold-like, then for every generic \(u\in U\) the allocation yield by \(u\) is not efficient.
- The demonetization of gold: transactions and the change in control
- Commodity money in the presence of goods of heterogeneous quality
- Gold, liquidity and secured loans in a multistage economy. I: Gold as money
- Endogenizing the provision of money: costs of commodity and fiat monies in relation to the value of trade
- Monetary general equilibrium with transaction costs.
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