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Money: A Market Microstructure Approach
Author(s) -
KRUEGER MALTE
Publication year - 2012
Publication title -
journal of money, credit and banking
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.763
H-Index - 108
eISSN - 1538-4616
pISSN - 0022-2879
DOI - 10.1111/j.1538-4616.2012.00530.x
Subject(s) - market microstructure , deregulation , unit of account , foreign exchange , business , database transaction , transaction cost , foreign exchange market , empirical evidence , monetary economics , unit (ring theory) , economics , industrial organization , commerce , macroeconomics , finance , computer science , philosophy , mathematics education , mathematics , epistemology , currency , order (exchange) , programming language
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.