Abstract
Many institutional changes have taken place to payments systems.
Indeed, they have been in continual change ever since money first
emerged as the dominant technology for conducting transactions. Means
of settlement between banks have changed: cheques replaced cash in many
transactions, and they have in their turn been replaced partially (much
more in some countries than others) by cards.
The aim of this paper is to appraise one such possible technological
development, namely electronic barter, and
to model both it and money as transactions technologies. By comparing the
models, we shall be able to appraise the future of fiat money. We
argue that the economising properties of fiat money will allow it to
survive, despite actual and hypothetised technical progress which reduces
the cost of electronic barter.
JEL classification: E42
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