Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/260161 
Authors: 
Year of Publication: 
2015
Series/Report no.: 
Working Paper No. 2015:23
Publisher: 
Lund University, School of Economics and Management, Department of Economics, Lund
Abstract: 
Eli F. Heckscher found that in 16th century Sweden: 1) indirect barter was the most common exchange method and 2) monetary exchange was carried out with different coins, none a generally accepted medium of exchange. These findings refute the search and transaction cost models of the emergence of money, which build on Jevons (1875) and Menger (1892). Instead, following up on Heckscher's suggestions, Alchian's (1977) model of money as the most saleable good by being the least costly to evaluate should be the basis for a positive theory of monetization. An increased quality of money causes monetization, which in turn spurs specialization in production. In addition, the government by demanding monetary payments of taxes and expenditures can force agents to overcome high initial costs of switching from barter to monetary exchange.
Subjects: 
monetization
Sweden
microfoundations of money
indirect barter
monetary exchange
double coincidence of wants
JEL: 
B22
E40
N13
Document Type: 
Working Paper

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