In this paper, we have compared concentrated creation of money with dispersive creation of money, and try to show, by using the results of computer simulation, the advantage of the method of dispersive money creation embodied into LETS in comparison with concentrated money creation. However, both ways of money creation have particular merits and demerits. We also estimate the effect of different rules for restricting the upper limits of debits of all participants in LETS on the rate of realized transactions in order to prevent free riding. First, we give an overview of LETS. Second, we show, using a computer simulation, the advantage of the method of dispersive money creation compared to concentrated money creation. Finally, we have demonstrated the validity of the ‘transaction indexation method’ to set the rules of determining the upper limit of debits in LETS to avoid free riding and to enhance transaction efficiency
Nozomi Kichiji and Makoto Nishibe
To cite this article: Kichiji, N. and Nishibe, M. (2012) ‘A comparison in transaction efficiency between dispersive and concentrated money creation’ International Journal of Community Currency Research 16 (D) 49-57 <www.ijccr.net> ISSN 1325-9547 http://dx.doi.org/10.15133/j.ijccr.2012.011
IJCCR 