The Evolution of Paper Money

Preprint OPEN
Levintal, Oren ; Zeira, Joseph (2009)
  • Subject: Banks; Convertibility; Fiat Money; Financial Intermediation; Liquidity; Paper Money
    • jel: jel:E4 | jel:E5 | jel:N1 | jel:N2
    acm: ComputerApplications_MISCELLANEOUS

This paper tells the story of how paper money evolved as a result of lending by banks. While lending commodity money requires holding large reserves of commodity money to ensure liquidity, issuing convertible paper money reduces these costs significantly. The paper also... View more
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