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Network Effects and Money

Stenkula, Mikael (2008). Network Effects and Money. Saarbrücken: VDM Verlag.

Mikael Stenkula

The common basis for this work is that it deals with money as a network good, i.e. that the value of a specific currency or payment technique is dependent on the number of users. This book analyzes monetary choice in the light of this network aspect from different perspectives. The so-called network effects, which may result from a network good, can work as reinforcement or as an obstacle to spontaneously or politically controlled changes in the monetary regime. As a result problems associated with the adoption of a new currency or new (electronic) payment techniques may arise.

The book includes both theoretical discussions as well as a discussion about Carl Menger´s monetary theory and its connection to the network effects of money. The last chapter of the book analyzes a specific case, namely the Euro cash changeover process that took place in 2002.

This work should be useful for people with a general interest in choice of monetary standards, but also for people who specifically want to read about the Euro Cash changeover process or Carl Menger’s monetary theory.