On Velocity in several Complementary Currencies

We analyse the velocity of several complementary currencies, notably the WIR, RES, Chiemgauer, Sol, Berkshares dollars, and several other cases. Then we describe the diversity in their velocity of circulation, and seek potential explanations for these differences. For example, WIR velocity is 2.6 while RES velocity is 1.9 despite being similar currencies. The higher speed may be explained by WIR blended loans among other benefits or by the fact that there are nearly 20.000 unregistered members that contribute with their transactions. Using a comparative method between cases, the article explores a number of possible explanations on the increases in velocity, apart from prevailing demurrage approaches

Complementary credit networks and macroeconomic stability: Switzerland's Wirtschaftsring

The Swiss Wirtschaftsring ("Economic Circle") credit network, founded in 1934, provides residual spending power that is highly counter-cyclical. Individuals are cash-short in a recession, and economize by greater use of WIR-credits. A money in the production function (MIPF) specification implies that transactions in WIR form a stabilizing balance that makes up for the lack of ordinary currency. Thus, unlike the ordinary money, WIR money is negatively correlated with GDP in the short run. This implication is confirmed by empirical estimates. Such credit networks play a stabilizing role that should be considered in monetary policy.Residual currency Complementary currency Counter-cyclical Monetary policy Monetary theory

Strategic Voting and Coalitions: Condorcet's Paradox and Ben-Gurion's Tri-lemma

The Condorcet paradox is a classic example of the power of agenda setting how it can determine the political outcome. A classroom voting game shows how alliances between voting blocs can determine an agenda. Agreements on how to vote after the agenda is set will be broken, however, if the partners are strictly self-interested. That is, no alliance is sub-game perfect. Informal classroom experiments suggest that alliances are more likely when successive opportunities for betrayal fall to both sides, rather than to one side only. These points are illustrated with a three-cornered dilemma posed by Ben-Gurion, one that 'sharpens' the Condorcet paradox by making the third alternative always impossible.

Computational Efficiency and Macroeconomic Stability under Centralized Exchange: Evidence from Swiss and US Exchange Data

Centralized exchange has a worst-case size-complexity many orders of magnitude lower than decentralized monetary exchange for the same number of agents and goods. A more rapid approach to competitive equilibrium may therefore be possible through centralized exchange. An additional benefit of centralized exchanges is macroeconomic stability: their volume of financial activity can be shown to vary inversely with the business cycle. This counter-cyclical tendency is shown by error-correction models, based on twenty-five years of data from a US exchange (the International Reciprocal Trade Association) and fifty-five years of data from a Swiss bank (WIR). This combination of computational efficiency and counter-cyclical activity suggests that the forms of exchange and credit enabled by these centralized exchanges may promote both microeconomic efficiency and macroeconomic stability. The financial activities of such exchanges, therefore, can complement a central bank’s monetary policy, although they do diminish its direct control of the money supply itself.size-complexity, centralized exchange, countercyclical policy