Clearinghouses, Credit, and Control
Clearinghouses, Credit, and Control
This chapter is devoted to a discussion of payment systems, credit, and credit clearinghouses. We more fully analyze the variations on the Fisher equation as the system structure changes (as mentioned in chapter 2). That structure might change depending upon the actual transactions being talked about. Next, we diagram how trade, the legal system, and the credit market are interconnected. Finally, we present a variation of the fiat money, no-loan market of chapter 7, in which we also model credit. If there is complete credit (trust) in the market, consumption will be efficient no matter how much money the traders have.
Keywords: clearinghouse, credit, credit evaluation, Fisher equation (equation of exchange), transaction size
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