Banknote counterfeit threat carries significant social costs, paper finds
A working paper from the Bank of Canada examines in detail why banknote counterfeiting occurs, and claims to be "the first to show that a threat of counterfeiting can indeed result in the collapse of a monetary equilibrium".
The paper: The Threat of Counterfeiting in Competitive Search Equilibrium, by Enchuan Shao, "investigates whether counterfeiting can occur as a pooling equilibrium in a competitive search environment where sellers make offers, and buyers see the offers and search toward
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