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Doing Without Money: A critical assessment of Woodford's analysis

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  • Colin Rogers

    (School of Economics, University of Adelaide)

Abstract

Woodford employs an inter-temporal general equilibrium model to examine the properties of the monetary system as it evolves form the use of a physical medium of exchange to an electronic medium. He presents a structure in which cash as a means of payment can be made to vanish at the limit but where he claims the price level remains determinate. It is shown that Woodford's analysis involves fundamental but still widespread conceptual and methodological errors. His general equilibrium model does not map into the world of electronic money and his analysis has no implications for the art of central banking.

Suggested Citation

  • Colin Rogers, 2004. "Doing Without Money: A critical assessment of Woodford's analysis," Method and Hist of Econ Thought 0411001, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpmh:0411001
    Note: Type of Document - pdf; pages: 33
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    References listed on IDEAS

    as
    1. Michael Woodford, 1998. "Doing Without Money: Controlling Inflation in a Post-Monetary World," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(1), pages 173-219, January.
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    3. Bennett T. McCallum, 2003. "Monetary Policy in Economies with Little or No Money," NBER Working Papers 9838, National Bureau of Economic Research, Inc.
    4. Kiyotaki, Nobuhiro & Wright, Randall, 1989. "On Money as a Medium of Exchange," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 927-954, August.
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    6. Mr. Alain Ize & Mr. Arto Kovanen & Timo Henckel, 1999. "Central Banking Without Central Bank Money," IMF Working Papers 1999/092, International Monetary Fund.
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    More about this item

    Keywords

    Electronic money; Cashless limit; Hahn property; Accounting systems of exchange;
    All these keywords.

    JEL classification:

    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System

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