Currency denominations, currency substitutions, and the price level

In a 1976 Journal of Political Economy paper, Chen has shown that gross substitutability is a necessary and sufficient condition for the deletion of a desirable currency denomination to be inflationary. The present note corrects and extends the theory by showing that such deletion is inflationary ev...

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Bibliographic Details
Published in:Journal of macroeconomics 1983-10, Vol.5 (4), p.511-513
Main Authors: Chen, Chau-Nan, Tsaur, Tien-Wang
Format: Article
Language:English
Subjects:
Currency
Economic theory
Inflation
Substitution
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Summary:In a 1976 Journal of Political Economy paper, Chen has shown that gross substitutability is a necessary and sufficient condition for the deletion of a desirable currency denomination to be inflationary. The present note corrects and extends the theory by showing that such deletion is inflationary even if monies are complements.
ISSN:0164-0704
1873-152X
DOI:10.1016/0164-0704(83)90038-1