Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/88212
Authors: 
Krueger, Malte
Year of Publication: 
2008
Series/Report no.: 
ROME Discussion Paper Series 08-01
Abstract: 
The current discussion about the future of the financial system draws heavily on a set of theories known as the 'New Monetary Economics'. The New Monetary Economics predicts that deregulation and financial innovation will lead to a moneyless world. This paper uses a market microstructure approach to show that a common medium of exchange that serves as unit of account will remain a necessary instrument to reduce transaction costs. This finding is supported by empirical evidence from foreign exchange markets.
Subjects: 
New monetary economics
monetary separation
market microstructure theory
monetary theory
moneyless world
financial innovation
JEL: 
E42
E44
G20
Document Type: 
Working Paper

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