Title: A hybrid fiat-commodity monetary system
Description: "In this paper I describe a "monetary" system in which backing is provided for the government's liabilities by way of contingent resort to taxes.  The system has some of the features of a commodity money system with a large seignorage spread between bid and ask prices.  It is studied within the context of a one-good, pure exchange model of two-period-lived overlapping generations in which, aside from various uniform boundedness assumptions, considerable diversity is allowed both within and across generations.  Two results are established: (i) the existence of at least one perfect foresight competitive equilibrium, and (ii) the Pareto optimality of any such equilibrium"--Federal Reserve Bank of Minneapolis web site.
Subjects: Public Debts, Mathematical models, Taxation