It should be so costly to obtain, that no one woud make the effort to obtain it. Gold does not work because it can be mined. The downside is that the inflation rate would be 1/1+growth rate and that is optimal only for growth rate=zero.
It's not optimal to use a currency that can be produced by others, but it still works as a currency! Plenty of examples of people using such currencies, gold included.
It should be so costly to obtain, that no one woud make the effort to obtain it. Gold does not work because it can be mined. The downside is that the inflation rate would be 1/1+growth rate and that is optimal only for growth rate=zero.
It's not optimal to use a currency that can be produced by others, but it still works as a currency! Plenty of examples of people using such currencies, gold included.
Indeed. But the resource cost adds to the constraints on optimal inflation targeting.