Estimating Optimal Denominations

William J. Luther
{"title":"Estimating Optimal Denominations","authors":"William J. Luther","doi":"10.2139/ssrn.2066090","DOIUrl":null,"url":null,"abstract":"Two distinct approaches have been taken in the literature to consider the optimal denominations of coins and banknotes. One approach reduces the problem to determining the smallest set of denominations capable of handling a given range of transactions. Another approach argues the optimal denomination structure would minimize the number of coins and banknotes used in the average transaction. Both are ultimately concerned with the optimal spacing of denominations. In contrast, I estimate the average range of denominations for coins and banknotes conditional on real income and the monetary unit employed. To illustrate the practical application of this approach, I use the estimates as a benchmark for evaluating the payment system of Somalia emerging after the state collapsed in 1991. I show that the surviving 1000 Somali shillings note is too small for conveniently making large transactions, but too large to make precise change in small transactions.","PeriodicalId":247622,"journal":{"name":"ERN: Fiscal & Monetary Policy in Developing Economies (Topic)","volume":"42 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2012-05-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"ERN: Fiscal & Monetary Policy in Developing Economies (Topic)","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2139/ssrn.2066090","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 0

Abstract

Two distinct approaches have been taken in the literature to consider the optimal denominations of coins and banknotes. One approach reduces the problem to determining the smallest set of denominations capable of handling a given range of transactions. Another approach argues the optimal denomination structure would minimize the number of coins and banknotes used in the average transaction. Both are ultimately concerned with the optimal spacing of denominations. In contrast, I estimate the average range of denominations for coins and banknotes conditional on real income and the monetary unit employed. To illustrate the practical application of this approach, I use the estimates as a benchmark for evaluating the payment system of Somalia emerging after the state collapsed in 1991. I show that the surviving 1000 Somali shillings note is too small for conveniently making large transactions, but too large to make precise change in small transactions.
查看原文
分享 分享
微信好友 朋友圈 QQ好友 复制链接
本刊更多论文
估计最优面值
文献中采用了两种不同的方法来考虑硬币和纸币的最佳面额。一种方法将问题简化为确定能够处理给定交易范围的最小面额集。另一种方法认为,最优的面额结构将使平均交易中使用的硬币和纸币数量最小化。两者最终都与面额的最佳间距有关。相比之下,我估计硬币和纸币的平均面额范围取决于实际收入和所使用的货币单位。为了说明这种方法的实际应用,我使用这些估计作为评估1991年国家崩溃后出现的索马里支付系统的基准。我展示了幸存的1000索马里先令纸币太小了,无法方便地进行大额交易,但又太大了,无法在小额交易中进行精确的改变。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
求助全文
约1分钟内获得全文 去求助
来源期刊
自引率
0.00%
发文量
0
期刊最新文献
Inflation and Productive Capacity - An Empirical Risk Reduction Model Hometown Favoritism and Intercity Investment Networks in China Financial Deepening and Entrepreneurial Growth in Nigeria: A Time Series Analysis (1986 – 2018) Benefits of FDI Subsidies: The Role of Funding Sources The Government Spending Multiplier in Latin American Countries: Does the Institutional Environment Matter?
×
引用
GB/T 7714-2015
复制
MLA
复制
APA
复制
导出至
BibTeX EndNote RefMan NoteFirst NoteExpress
×
×
提示
您的信息不完整,为了账户安全,请先补充。
现在去补充
×
提示
您因"违规操作"
具体请查看互助需知
我知道了
×
提示
现在去查看 取消
×
提示
确定
0
微信
客服QQ
Book学术公众号 扫码关注我们
反馈
×
意见反馈
请填写您的意见或建议
请填写您的手机或邮箱
已复制链接
已复制链接
快去分享给好友吧!
我知道了
×
扫码分享
扫码分享
Book学术官方微信
Book学术文献互助
Book学术文献互助群
群 号:481959085
Book学术
文献互助 智能选刊 最新文献 互助须知 联系我们:info@booksci.cn
Book学术提供免费学术资源搜索服务,方便国内外学者检索中英文文献。致力于提供最便捷和优质的服务体验。
Copyright © 2023 Book学术 All rights reserved.
ghs 京公网安备 11010802042870号 京ICP备2023020795号-1