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The Susan B. Anthony Dollar and the Theory of Coin/Note Substitutions

1994; Wiley; Volume: 26; Issue: 3 Linguagem: Inglês

10.2307/2078014

1538-4616

John P. Caskey, Simon St. Laurent,

Economic theories and models

This paper analyzes governments' attempts to replace circulating notes with coins. It argues that because of network externalities in currency systems, a government cannot simply offer a new coin, such as the Susan B. Anthony dollar, to the public and expect it to circulate, even when the coin/note substitution would benefit the economy. For such a substitution to succeed, a government may need to force the adoption of the coin by withdrawing the competing bill from circulation. Copyright 1994 by Ohio State University Press.