In chapter 2 of my book Monetary Theory and
Policy (The MIT Press, 4th ed., 2017), I called
the problem of establishing a positive value for money the 'Hahn problem'. Hahn
described this problem in “On Some Problems of Proving the existence of an
equilibrium in a monetary economy,” published in The Theory of Interest
Rates, F. H. Hahn and F. P. R. Brechling eds. London: Macmillan, 1965. Pp.
126- 135.
Recently, Pierrick Clerc of the HEC Liège School of Management (https://sites.google.com/site/pierrickclerc/) has pointed out to me
that the term was used a decade earlier by Kevin Sontheimer in “The
determination of money prices”, Journal of Money Credit and Banking,
1972, 4(3), 489-508. Sontheimer solves the Hahn problem by employing a model in
which there are costs to transacting that take the form of foregone leisure.
This means his model falls within the general class of shopping time models
discussed in section 3.2.1 of chapter 3 of Monetary Theory and Policy.
I would like to thank Pierrick for sending me the
Sontheimer paper.
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