Essays on money and credit
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My dissertation analyzes the private currency system and credit market. In the first chapter, I investigate a situation where a private entity supplies money without a central bank. In Somalia, after the central government collapsed, private money suppliers emerged and provided money, resulting in the stable economy. Plus, Somalis used both Somali currency and dollar as a medium of exchange. We discuss the role of foreign currency for which sellers perfectly recognize the value and the condition of the adoption of dual currency system. In the second chapter, I analyze the credit market with heterogeneity in labor productivity. Variations in labor productivity lead to information asymmetry, potentially resulting in reduced contract sizes. I demonstrate the existence of separating, non-default pooling, and default pooling equilibria, which depend on the level of monitoring and the population distribution across two different productivity level. I also identify multiple equilibria and refine the equilibrium space by applying the undefeated equilibrium concept developed by Mailath, Okuno-Fujiwara, and Postlewaite (1993)
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Ph. D.