Research Areas and Interests
Monetary theory & money search models
Experimental macroeconomics
Dual currency and multi-currency economies
Complex systems and agent-based modeling
Bitcoin and cryptocurrencies
Working Papers
Rietz, J., Nikolov, V., and Kaya, D. An Idea Worth Its Salt? Experimental Evidence on the Origins of Money. Link. Online Appendix.
The long-standing debate as to the origins of money roughly breaks down into two schools of thought: the Mengerians, who believe that the good in highest demand or the most ``saleable'' would naturally emerge out of barter to become money, and the chartalists, who believe that guidance by a central authority was required as differences in demand alone could not lead to the spontaneous emergence of such a complex social technology. To assess these opposing theories, we test in a controlled laboratory setting a money search model in which goods only vary by demand and supply. We find that differences in demand alone can indeed lead to the emergence of money even with no central direction or communication between subjects, though differences in supply have little impact. Moreover, subjects appeared to be unaware that they were using a good as a medium of exchange, further suggesting it was an emergent, evolutionary phenomenon.
Publications
Rietz, J. (2019). Secondary currency acceptance: experimental evidence with a dual currency search model. Journal of Economic Behavior & Organization, 166, 403-431. Link.
Merrill, P., Austin, T. H., Rietz, J., & Pearce, J. (2020). Ping-pong governance: Token locking for enabling blockchain self-governance. In Mathematical Research for Blockchain Economy (pp. 13-29). Springer, Cham. Link.
Pollett, C., Austin, T., Potika, K., & Rietz, J. (2020). TontineCoin: Murder-based proof-of-stake", In 2nd IEEE International Conference on Decentralized Applications and Infrastructures (IEEE DAPPS). Link
Merrill, P., Austin, T., Thakker, J., Park, Y., & Rietz, J. (2019). Lock and load: a model for free blockchain transactions through token locking. In 2019 IEEE International Conference on Decentralized Applications and Infrastructures (DAPPCON) (pp. 19-28). IEEE. Link.
Works in Progress
"An idea worth its salt? Archaeological and economic evidence of salt money in prehistoric Europe." With Vassil Nikolov and Deniz Kaya.
"Secondary currency acceptance in an agent-based model with evolutionary learning."
I employ agent-based models (“ABMs”) to explore the dynamics of the dual-currency, money search model from Kiyotaki and Wright (1993) as in my paper "Secondary Currency Acceptance: Experimental Evidence." Like laboratory experiments, ABMs allow researchers to test theory in a controlled setting and to analyze emergent behaviors of agents that lead (or not) to equilibria. However, unlike experiments, ABMs also provide researchers with the opportunity to test many more parameter settings with a larger number of heterogeneous agents over a longer period of time than would be possible with human subjects.
"International capital flows vs. the Federal Reserve as determinants of U.S. interest rates."
Over the last 20 years, there has been a significant inflow of foreign capital into the United States in the form of U.S. Treasury securities purchases, particularly by foreign governments and official institutions (“FOI”). While several past studies have considered the impact of such flows on U.S. long-term interest rates, few, if any, have simultaneously included Federal Reserve purchases of Treasury securities. In this paper, I undertake an empirical analysis that includes both types of purchases, particularly relevant given the Fed’s recent large-scale asset purchase program, and have included updated data through April 2014.