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On the Simultaneous Emergence of Money and the State

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Abstract

We construct a infinite-horizon political game where the production of a public good is delegated to a politician. The politician is controlled by finitely many citizens who, on the other hand, trade commodities and pay taxes on a voluntary basis. We provide conditions in terms of heterogenous beliefs under one single commodity is used both as a universal means of exchange and a means to pay taxes. These provide an analytical framework for the understanding of money as originating both from the private and the public sector simultaneously

Suggested Citation

  • Gaël Giraud & Myrna Wooders, 2012. "On the Simultaneous Emergence of Money and the State," Documents de travail du Centre d'Economie de la Sorbonne 12094, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    • Handle: RePEc:mse:cesdoc:12094
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    More about this item

    Keywords

    Money; strategic market game; political economy; heterogenous beliefs;
    All these keywords.

    JEL classification:

    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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