Mengerian Saleableness and Commodity Money in a Walrasian Trading Post Example
- Author(s): Starr, Ross M.
- et al.
In an economy with commodity-pairwise trading posts and transaction costs, commodity money is endogenously determined in general equilibrium. Absent double coincidence of wants, the low-transaction cost commodity (with the narrowest proportional bid/ask price spread) becomes the common medium of exchange.