Credit, inflation and multiple currencies. Consequences on welfare and growth.

Summary This thesis focuses on the competition between means of payment. First, we present a prospecting model to recover Tooke's (1844) thesis: money is used in transactions between entrepreneurs and wage earners. credit is used in transactions between entrepreneurs. Subsequently, we present a model in which agents can use credit or money, although the use of credit is subject to fallible technology. Wider access to credit does not necessarily imply welfare improvement as it may make risk sharing less efficient. We perform a quantitative analysis using data from the United States and show that the expansion of credit access in recent years has not led to welfare improvement. Second, we address a seemingly paradoxical finding: national currencies remain the primary medium of exchange in most economies, despite the availability of less inflationary currencies. We show that, if banks have limited debt enforcement power, the inflation of the currency in which debts are denominated can operate as a commitment device for borrowers so that, in equilibrium, agents prefer the more inflationary currency, even in the absence of transactions costs to use the competing currency. Finally, we study the effect of inflation and financial system efficiency on growth and welfare. Our formalization of the monetary exchange of the innovation market allows us to estimate a broader cost of inflation than previous estimates.