Money Function Research Articles

James Steuart and the making of Karl Marx’s monetary thought

This paper analyses the influence of James Steuart on Karl Marx’s monetary thought. It deals more specifically with Marx’s rejection of an automatic mechanism that links variations in the quantity of money to their direct impact on prices. Steuart’s pioneering discoveries in economics inaugurate an anti-quantity theory tradition that Marx supported and which fed his own conception of money and credit. Here, we deal with the criticism of the assumptions of the quantity theory of money (QTM), the specifically social character of labour which creates exchange value, the distinction between the functions of money, the difference between income spending and capital advances, and the difference between simple circulation and reflux of money credit.

Nexus of Money Function and Its Effect on Inflation Rate in Thailand and Indonesia

This study aims to investigate the development function of money. At the beginning, function of money is a barter between two commodities, C and C'. Then this becomes C-M-C' when the money is once introduced. The M-C-M' occurs when a businessman utilizes the money (M) to produce commodity (C) and resells it to generate more money (M'). Finally, the trading process of M - M' shows the capital or financial market, like the money or security market. The development of the function of money is shown by the changes of the money supply that measured with the inflation rate. This study contributes to advise the central bank in Thailand and Indonesia in managing the role of the central bank's credibility in achieving the inflation target and the proposed rules on monetary policy. Based on the data of 1990-2015 and using ANOVA and the regression analysis (α = 5%) the results show that 1) there is a significantly difference between the currency outside, demand deposits, and quasi-money; 2) the currency outside and the demand deposits in-significantly affects on the inflation rate; 3) the quasi money in-significantly affects and significantly affects on the inflation rate in Thailand and Indonesia.

МИРОВЫЕ ВАЛЮТЫ: СРАВНИТЕЛЬНЫЙ АНАЛИЗ В КОНТЕКСТЕ ДЕНЕЖНЫХ ФУНКЦИЙ

The creation of the conditions influencing a high international demand for a monetary unit providing its stability and also the opportunity of use by non residents contribute to its use in the world as a unit of account, means of payment and store of wealth. In the article the conditions of the achievement by national (common) monetary units of the USA, euro zone, Great Britain, Japan and China of the status of world currencies are studied. The role of the US dollar, euro, pound sterling, Japanese yen and yuan in the process when fulfilling the functions of money beyond the countries’ (country unions) boundaries that issue them is shown. The conclusion is made about an incomplete conformity of contemporary conditions determining the demand of non residents for a common European and Chinese national currency judging from the volumes of their use by the agents of the world market. On the basis of the comparative analysis of the volumes of the transactions with modern world currencies the primary role of the US dollar, euro, pound sterling, Japanese yen and Yuan as a unit of account at the creation of the demand for them, their role as means of payment and also a store of wealth are proved. It is shown that a further internationalization of monetary functions of a common European unit and the national currency of China is possible on the basis of the conservation of the euro zone unity, achievement of a complete convertibility of the yuan and also under the condition of the development of the financial market of China. The conclusion is made about a long-term character of this prospect what is connected with the necessity of a partial reorientation of the choice of the agents of the world market continuing to use by inertia the US dollar as the only world currency. The suggestion is made to move in the direction of a wider use of the euro and the yuan as a standard of value, a means of payment and a reserve instrument.&nbsp

Shadow Money in the 19th Century: Is Marx Relevant for Understanding Contemporary Shadow Money?

ABSTRACTThe growth of shadow money, since the 1980s, has implications for both central bank policy and the theorization of money. However, modern shadow money has a historical analogue in the private bill market of 19th century England This article explores the relevance of Marx’s logical and historical analysis of the evolution of the forms and functions of money in capitalist economies, and his concrete analysis of the bill market in order to understand shadow money today.

Meanings and Functions of Money in Different Cultural Milieus.

We explore the psychological meanings of money that parallel its economic functions. We explore money's ability to ascribe value, give autonomy, and provide security for the future, and we show how each of these functions may play out differently in different cultural milieus. In particular, we explore the meanings and uses of money across ethnic groups and at different positions on the socioeconomic ladder, highlighting changes over the last 50 years. We examine the dynamics of redistribution between the individual, the family, and the state in different cultures, and we analyze the gendering of money in the world of high finance and in contexts of economic need. The field of behavioral economics has illustrated how human psychology complicates the process of moving from normative to descriptive models of human behavior; such complexity increases as we incorporate the great diversity within human psychology.

Can cryptocurrencies fulfil the functions of money?

This paper analyses the monetary characteristics of five cryptocurrencies to evaluate whether they can perform the functions of money. While all cryptocurrencies can theoretically and practically serve as a medium of exchange, they are unlikely to become common and liquid media of exchange unless they can illustrate utility in one of the other functions of money. Digital currencies’ rigidly inflexible supply and wildly fluctuating demand make them too unstable to be used as a unit of account for the foreseeable future. Of the five, only Bitcoin has the potential to serve as a store of value, due to its strict commitment to low supply growth, credibly backed by the network’s distributed protocol and credible demonstration of the absence of any authority capable of altering the supply schedule. Other cryptocurrencies’ centralized control, and use as tokens for specific applications make them unlikely to fulfil monetary functions.

THE FUTURE OF CRYPTO-CURRENCY IN THE ABSENCE OF REGULATION, SOCIAL AND LEGAL IMPACT

The Internet revolution is fast outpacing the law and creating a newer world with the momentum of gripping the unwary crowd into a boundless world of anarchism. Money is defined as a medium of exchange, store of value, and a unit of account ( www.cliffnotes.com Date of use: 28/10/2017). Crypto-currency is a new wake in the digital reality that is performing the above functions of money. There are about 1,541 crypto-currencies traded in 8,894 markets by exchangers ( www.coinmarketcap.com Date of use: 28/01/2018). Prominent among these crypto currencies, is the Bitcoin which as a single coin had a monetary value of $0.05 USD in July 2010 and in November 2017, was valued at $18,000 ( www.useyourselfmedia.today Date of use: 28/10/2017). The drivers of crypto-currencies are basically the block-chain which is a technology, others are the exchanges, financial services provider, wallet services provider and miners. Under most jurisdictions, the exchanges and service providers are either not regulated or partially regulated. Regulations in the financial sector, are tools used in monitoring the movement of funds, fraud, financial crimes and money laundering, criminal activities, as well as the protection of consumers. In the absence of regulation, this paper seeks to examine the trend and legality of the crypto currency as a virtual currency and its current and future impact on the society. To achieve this, some monetary regulations will be evaluated and an attempt will be made to adapt these regulations to the crypto-currency framework. At the end of the paper, challenges will be identified with a view to recommending a regulated regime in the use of crypto-currencies for a safer society and consumer protection.

Pemikiran Imam Al-Ghazali Tentang Uang

Imam al-Ghazali perspective, money has two function, those were a medium of exchange and as a unit of account. So, the money demand was for transaction motive and precautionary motive. Depend on, in conventional economics, the function of money was a store of value and wealth that make the demand money is for speculative motive. As the result of this was encourage a person to make money as a business commodity, that can be traded by interest orientation. Because, interest was considered as a price in using money. So, person was more interest in trading money in the non real sector, than used as a transaction in the real sector. This problem could result in the inhibition of the flow of economic activity.Saran sitasi: Rosia, R. (2018). Pemikiran Imam Al-Ghazali Tentang Uang. Jurnal Ilmiah Ekonomi Islam, 4(01), 14-27. doi:http://dx.doi.org/10.29040/jiei.v4i1.161

The Money-Energy-Technology Complex and Ecological Marxism: Rethinking the Concept of “Use-value” to Extend Our Understanding of Unequal Exchange, Part 1

ABSTRACTThis is Part 1 of an article arguing for an extended application of Karl Marx’s insight that the apparent reciprocity of free market exchange is to be understood as an ideology that obscures material processes of exploitation and accumulation. Rather than to confine this insight to the worker’s sale of his or her labor-power for wages, and basing it on the conviction that labor-power is uniquely capable of generating more value than its price, the article argues that capital accumulation also relies on asymmetric transfers of several other biophysical resources such as embodied non-human energy, land, and materials. It proposes that the very notions of “price” and “value” serve to obscure the material history and substance of traded commodities. Such a shift of perspective extends Marx’s foundational critique of mainstream economics by focusing on the unacknowledged role of ecologically unequal exchange, but requires a critical rethinking of the concept of “use-value.” It also suggests a fundamental reconceptualization of the ontology of technological progress, frequently celebrated in Marxist theory. Part 1 of the article introduces the argument on unequal exchange, the ideological function of money, some concerns of ecological Marxism, and the conundrum posed by three contradictory understandings of “use-value.”

The Issues and Implications About the Volatility of the Stock and the Bond Prices and Their Returns and the Volatility of Interest Rates and Inflation - Which Are Being Researched in Finance and Macro-Monetary Economics Literature: A Survey

Volatility of returns of the financial assets, and the volatility of the inflation and aggregate demand, are important issues in the Financial markets, and the macro- monetary economics. In this article, the volatility in the stock and bond markets are surveyed and discussed in detail. Our view is that the higher volatility in the long-term rates than in the short-term rates, may be due to the higher leverage effect in the long-term markets and rates than in the short -term rates. In the previous century, last fifty years, the average stock returns were much higher and the expected return or the cost of capital was lower. The conditional volatility models and the volatility spill over between the spot and futures markets and their implications are deeply explored in this article along with the price discovery between spot and futures markets and the conditions for the efficiency in these markets. In our section dealing with Macro- monetary economics, the effect of the variability of inflation on the demand for money function, on the nominal rates of interest, and on the slope of the aggregate supply curve, are brought into sharp focus and is being discussed through the relevant literature survey.

Argumenty przeciw „pieniądzom z helikoptera”

Since the outbreak of the latest financial crisis central banks in several countries have decided to apply non-conventional monetary policy measures. Other monetary authorities behaved more conventionally but conducted a very loose monetary policy anyway. The goal of the paper is to discuss threats and possible consequences of treating the money instrumentally (monetary easing, government financing by the central bank). The authorities tend to arbitrary reinforce just one function of money, a medium of exchange, in order to artificially increase the sales and production of goods and services while neglecting other major function: a store of value. Fast growing money aggregates, awareness that there is no limit for money creation, and ideas such as “helicopter money” stimulate the attempts to storage the wealth in different form, e.g. cryptocurrency. The remarks were formulated from the conventional and Islamic finance perspective. Statistical data come from the euro area, Poland, and Iran, where banking system is fully Islamic.

Marcel Mauss und ökonomische Theorien. Die Institution Geld

This paper puts Marcel Mauss’s concept on money in the context of economic theories. Mauss articulated his thoughts on money in the first decades of the 20th century. They are considerably less known and discussed than his famous essay on ‘the gift’. Nevertheless, his contributions on the origin and function of money are worth being examined in economics as well as in economic-anthropological discourse. This essay relates Mauss’s ideas to microeconomic theories. The argument pursued is that his concepts on money are both compatible with neoclassical, and with New Institutional Economic theories. For this purpose, the text addresses three parallels.

Neke nove refleksije o građansko-trgovačkim specifičnostima novčanih obveza

Novčane obveze posebno su atraktivna pravna kategorija u građanskom i trgovačkom pravu. U ugovorima o kreditu, napose u ugovoru o potrošačkom kreditu to dolazi do posebnog izražaja. Novac ima, međutim, isključivo funkciju vrijednosti i irelevantno je u kojoj će valuti ugovorne strane to izraziti. Pad te vrijednosti zahtijeva potrebu “usklađivanja” koja se vrši na više načina. Vjerovnik nema pravo dobiti natrag veću glavnicu nego što ju je dao, ali ima pravo održati njenu realnu vrijednost. Isto pravo, dakako, ima i dužnik kada novčana kretanja idu prema vjerovniku, tj. kada novac aprecira

CAN BITCOIN BECOME MONEY? ITS MONEY FUNCTIONS AND THE REGRESSION THEOREM

Bitcoin as a payment system indisputably offers an advantage over the government currencies in transaction time and costs. On the other hand the moneyness of Bitcoin itself is questioned. This paper analyzes Bitcoin from the Austrian perspective and compares the qualities of Bitcoin with qualities of good money in order to find out whether Bitcoin could serve as money. The examined properties are portability, storability, divisibility, recognizability, homogeneity and scarcity. Moreover it examines the consistency of Bitcoin emergence as a medium of exchange with Mises? regression theorem and identifies the non-monetary value of Bitcoin. The result of this theoretical analysis shows that Bitcoin?s properties can facilitate the functions of money.

Adam Smith's Analysis of the Good (Sober People) and the Bad (Projectors, Prodigals and Imprudent Risk Takers): The Proper Role of the Central Bank in Generating the Wealth of Nations Using the Visible Hand to Empower the Sober People by Using Targeted Bank Policy

Adam Smith, building on the work of Plato (Socrates) and Aristotle, who had analyzed the political, economic, and social conflict that engulfed Athens in the Fifth century B. C., identified two competing economic groups. These two were the (Middle Class) Sober people (merchants, small businesses, farmers) and the (Upper Class) Prodigals, Imprudent risk takers, and Projectors (financial speculators and manipulators, rentiers). The overall well being of the state over time required that the Sober people had to be able to maintain political and economic dominance over the Prodigals, Imprudent risk takers, and Projectors. Smith recognized that the Sober people used money mainly as a medium of exchange to engage in transactions that involved the production of consumer and producer goods over time. The purchase of producer goods was aimed at providing future consumer goods. Aristotle discussed this function and use of money as C-M-C’. Smith also recognized that the Prodigals, Imprudent risk takers, and Projectors did not generally use money for the production and consumption of present and future consumer goods. The Prodigals, Imprudent risk takers, and Projectors used money mainly for speculative purposes only. Aristotle had analyzed the misuse of money in terms of his discussions of M-C-M’ and M-M’. Aristotle recognized that society would end up with severe political, economic, and social problems, as occurred in Athens, if the Prodigals, Imprudent risk takers, and Projectors were to be able to dominate. The result would be a large decrease middle class and a large increase in the lower class. Aristotle did not know how to deal with this problem other than to condemn the uses of money that led to M-C-M’ and M-M’ results on ethical grounds that were related to the failure of such individuals to lead a virtuous life. Smith,on the other hand, saw how an independently functioning central bank could engage in banking policies that would strengthen the sober people and retard the influence of the Prodigals, Imprudent risk takers, and Projectors so as to allow the former to maintain dominance over the latter. The result would be economic growth and a growing, wealthy state. Economists who specialize on Smith have generally (Kennedy is an exception) ignored Smith’s 50 plus pages of exposition concerning the inherent dangers that will occur if Prodigals, Imprudent risk takers, and Projectors obtain the majority of bank loans and the Sober people are cut off from such loans, except at very high rates of interest. The result will be stagnant economic growth, increasing inequality, very low increases in the real wage, and a major decline in the middle class. Of course, neither Aristotle nor Smith would be surprised at what has happened economically since the late 1970’s, since they predicted exactly what has happened in the American and world economy 2,400 and 240 years ago, respectively. What is shocking is the nearly complete absence of any general understanding among modern day analysts and economists of the clear cut conclusions arrived at, first by first Aristotle and then by Smith. Keynes can be viewed as attempting to further explain, in a technical sense, what is already contained in the literary analysis in Aristotle and Smith.

From Keynes Back to Smith and Aristotle: Liquidity Preference, Hoarding, and Speculation

Aristotle, basing his work on Plato (Socrates), was the first to clearly, explicitly and technically identify how an economy at the macro level could fail. There were four possible ways of analyzing the impact of exchange, one without money and three with money. Aristotle’s literary discussion and analysis can be summarized by these four equations-C-C’ (Barter-no money used), C-M-C’ (medium of exchange function of money - using money to assist and expedite the production of consumer and producer goods), M-C-M’ (commodity speculation-real estate and stock bubbles), and M-M’ (usury; hoarding; accumulation of money; using money to make money without any production of consumer and producer goods). Problems are generated at the macro level if speculative and rentier behavior comes to dominant economic behavior, which is aimed at using money to facilitate the production of consumer and producer goods at the micro level. Keynes recognized where Aristotle’s analysis led to. It led to Keynes’s theory of liquidity preference (propensity to hoard) explanation of the rate of interest. Basically, Keynes’s IS equation is a development of Aristotle’s C-M-C’ function, where money is used to facilitate the production of consumer and producer goods. Keynes’s liquidity preference function, LP(LM), is a development of Aristotle’s M-C-M’ and M-M’ equations. Of course, Smith had gotten to the core of Aristotle’s theory of money and the consequent economic problems that resulted from its misuse with his distinction between the sober people and the Projectors, Imprudent Risk takers and Prodigals. The Sober people used money as in C-M-C’ while the Projectors, Imprudent Risk takers and Prodigals used money as described by the M-C-M’ and M-M’ equations. Thus, Smith developed Aristotle’s theory while Keynes developed Smith’s theory. Keynes’s speculators and rentiers are Smith’s Projectors, Imprudent Risk takers and Prodigals, which are Aristotle’s users of money explained by the M-C-M’ and M-M’ equations. Smithian and Keynesian economics are best understood as technical developments of Aristotle’s development of Plato (Socrates). Aristotle, Smith and Keynes all linked the macroscopic problems of deflation and inflation, resulting primarily from a constant and repeated series of bubbles, to the behavior of Projectors, Imprudent Risk takers and Prodigals, who had obtained the aid of the private banking system. The problem will continue to repeat indefinitely until the Central Bank is retaken by representatives of the Sober people and the banking policies of 1934-1978 reinstituted with stronger firewalls incorporated to prevent the central bank from ever being captured again by Wall Street, which represents the modern version of Smith’s Projectors, Imprudent Risk takers and Prodigals.

Developing a Digital Currency from an Islamic Perspective: Case of Blockchain Technology

Numerous studies ranging from concept papers and reviews were conducted on the matter of blockchain and digital currencies. However, those two areas are not well researched due to its being a new area of research. Furthermore, the research on blockchain applications in the Islamic financial system precisely the potential of digital currency in providing a better alternative to current fiat money system which will be the scope of this article. The aim of revolves around exploring the potential and capability of introducing a digital currency that fulfills the Islamic law (Shari’ah) functions of money and provides a more stable currency than fiat money. The method used for analyzing this object includes a library research on related topics that helps understanding the functions of money and digital currencies and study of several cases that can assist in fulfilling the objectives of this paper in introducing an Islamic digital currency through detailed research of Islamic theory of money and civilization as well as the developments of blockchain, our findings point towards the ability of introducing a Shari’ah-compliant digital currency if all the issues on validity are addressed and resolved. However, the area of digital currencies and blockchain requires further research from a Shari’ah perspective to facilitate a better understanding on the topic.

Money: communicative functions of payment and price

ABSTRACTMoney is rich in semiotic potential and its capacity to express social identity and collectivity is well established. This essay explores a range of communicative functions of money, focusing in particular on the ways in which payments and prices may serve as cultural signals. It asks how the communicative significance of money might change as a result of the introduction of new types of currency, payment systems and pricing techniques, and suggests that such developments are likely to involve revisiting two key tensions: between state or corporate power on the one hand, and individual autonomy and privacy on the other; and between money’s power to generate collectivity and its power to divide and exclude.

The Capital Structure of Nations*

When a nation can finance its investments via foreign-currency denominated debt or domestic-currency claims, what is the optimal capital structure of the nation? Building on the functions of fiat money as both medium of exchange, and store of value like corporate equity, our model connects monetary economics, fiscal theory and international finance under a unified corporate finance perspective. With frictionless capital markets both a Modigliani-Miller theorem for nations and the classical quantity theory of money hold. With capital market frictions, a nation's optimal capital structure trades off inflation dilution costs and expected default costs on foreign-currency debt. Our framing focuses on the process by which new money claims enter the economy and the potential wealth redistribution costs of inflation.

Diskursus Uang dalam Kitab Ihya’ Ulum Al-Din Karya Al-Ghazali

Abstract:Study of the concept of Money, according to al-Ghazali (the study Analysis in the book Ihya ' Ulum al-Din) is something that is interesting al-Ghazali figures considering with the depth of their knowledge no doubt by a muslin or non muslim thinkers of the times until now, she was known as an expert tasawauf than an economist. However, al-Ghazali turns out to have an independent view on the issue of money. The question that arises is how the concept of money, according to al-Ghazali's Ihya Ulum al in Al-Din?This research used the qualitative approach, and the Office research library research. As a first step in this research is an inventory of data sources, namely the collection of references that are relevant to research topics, in accordance with the research objectives. From the sources of the data, collected, identified and recorded all of the information that has relevance to the themes of researchOf research results as well as searches of the Ihya ' Ulum al-Din, was that the concept of money al-Ghazali is inseparable with ethical values, al-Ghazali argues that money is something which is very important in business activity, because money is one of the delights of God, money is the enforcement of the world, and humans will always need it, then al-Ghazali argued that the function of money is as a means of Exchange is not as a commodity that could be sold. Al-Ghazali warned of the dangers of false money and how the solution, so also he warned that the danger of usury can damage the joints, so that Muslims are always vigilant and always ask for the fatwas of the scholars in order to avoid the usury.Keyword: Money, al-Ghazali, Analysis