analyse how money helps specialisation and trade to occur
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Answer: Abstract
This paper examines the relationship between specialization and the use of money in two versions of the search-theoretic monetary model. The first version establishes a surprising result that specialization is more likely to occur in a barter economy than in a monetary economy. The result is reversed in the second version where a different specification of preferences is adopted to limit the scope of barter. This contrast between the results provides a concrete illustration of the general argument that money encourages specialization only when it enlarges the extent of the market.
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Economic Theory provides an outlet for research in all areas of economics based on rigorous theoretical reasoning and on topics in mathematics that are supported by the analysis of economic problems. Published articles contribute to the understanding and solution of substantive economic problems. Among the topics addressed in the journal are classical and modern equilibrium theory, cooperative and non-cooperative game theory, macroeconomics, social choice and welfare, uncertainty and information, intertemporal economics (including dynamical systems), public economics, international and developmental economics, financial economics, money and banking, and industrial organization. In addition to original research articles, Economic Theory publishes surveys for particular areas of research that clearly set forth the basic underlying concepts and ideas, the essential technical apparatuses, and the central open questions.
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