Division of labor, money, and economic progress

Research output: Contribution to journalArticleResearchpeer-review

4 Citations (Scopus)


This paper develops a general equilibrium model to formalize Adam Smith's insight on the relationship between the division of labor, the emergence of money, and economic progress. The model demonstrates that the division of labor is the driving force behind the emergence of money, and the use of money in turn stimulates further division of labor. It also shows that the use of money substitute can improve welfare.

Original languageEnglish
Pages (from-to)354-368
Number of pages15
JournalReview of Development Economics
Issue number3
Publication statusPublished - 1 Jan 1999
Externally publishedYes

Cite this