Program > Papers by author > Camargo Braz

Tuesday 13
D5 - Fiscal Policies and Behavior of Economic Agents II
Chair: Régis Breton
› 15:15 - 15:40 (25min)
› Room 004 - T. Arbeau
On the Origin of Money
Luis Araujo  1@  , Vincent Bignon  2@  , Régis Breton  3@  , Braz Camargo  4@  
1 : FGV de Sao Paulo  (FVG)  -  Website
2 : Banque de France  (SAMIC)  -  Website
Banque de France
DGEI-DEMS-SAMIC 46-2401; 31 rue Croix des Petits Champs 75001 Paris -  France
3 : Banque de France  -  Website
Banque de France
DGEI-DSF 31 rue Croix des Petits Champs 75001 Paris -  France
4 : FGV de Sao Paulo  (FGV)  -  Website

The widely accepted account of the origin of money (see, e.g., Menger 1892) is that it grew out of the inefficiency of barter. This efficiency view of the origin of money, however, does not square well with historical and anthropological evidence that money often grew out of the destruction of some fairly sophisticated credit arrangements, and that its introduction was not necessarily associated with an increase in prosperity. In this paper, we develop a model of the origin of money that is consistent with the facts that trade can flourish without money and its use need not trigger prosperity. We show that the introduction of money can be explained by the fact that governments may be able to better tax agents if trade is conducted through money instead of credit even if credit trade is more efficient than the monetary trade. Our paper thus provide support for a fiscal theory of the origin of money.


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