Issues of trust in money and the monetary system

Abstract

Subject. The article deals with two main confidence issues, i.e. economic agents’ choosing the bearer of the institution of money and assessment of confidence in the monetary unit. Objectives. The purpose is to perform a comprehensive study of the main problems of trust in money in economic relations, to assess the elements of trust that lie in the way of economic agents' choice of forms of money, and to characterize our approach to the assessment of trust. Methods. The study rests on the methodology of the new institutional economic theory, using methods of comparative, logical, and statistical analysis. Results. We revealed a five-level hierarchical structure of trust in money that demonstrates the formation of trust in the monetary unit through the trust in the State, that is, the arrangement of the national monetary system and the reputation of monetary organizations, as well as through the trust in the functions they perform. We unveiled indicators of trust that are under the influence of endogenous and exogenous political, institutional, economic, functional, and socio-psychological factors, and that are subject to quantitative assessment. Conclusions. Trust in the institution of money is characterized by dependence on the designated endogenous and exogenous factors, which include the identified indicators of trust assessment, and which influence an individual's choice of a certain form of money. According to our own approach, it is advisable to evaluate trust in terms of its presence or absence, which, in turn, can be determined through the presence of a doubt factor in respondents.