Money Function Research Articles

The Legacy of Mathématique Sociale in Italy and Ricardian Economics: The Case of Francesco Fuoco

This article discusses the contribution made by Francesco Fuoco (1774–1841) to the methodological debate in the early nineteenth century. In opposition to Say’s view, Fuoco defended the validity of the deductive method in economic analysis, upholding the mathématique sociale tradition. This perspective characterizes his main work, Saggi economici (1825–27), in which he expounded a systematic view of economic theory and synthesized, within the framework of deductive methodology, a typical subjectivist theory of value, drawn from Condillac, with the new Ricardian theory of distribution. As he engaged in defense of the deductive nature of economic analysis, Fuoco found confirmation of the validity of the mathématique sociale tradition in the Ricardian “new theory” of rent. In this analytical context, Fuoco’s original contribution lay in the importance that he assigned to the money function in the capitalist economy.

Stranger Times: The Impact of Relativistic Time Concepts on the Time Value of Money

The notion that time is relative has been widely accepted by physicists since Albert Einstein formulated his theory of relativity in 1905. However, many other scientific disciplines, like finance and economics, have thus far disregarded relativistic time concepts. In this paper, I show how a relativistic approach towards time influences the core principle of finance theory, the time value of money concept. I show that, to avoid arbitrage, relativistic time concepts call for an adjustment to time value of money calculations – the concept of proper interest. Adjusting time value of money functions leads to a market-wide changes in financing costs for firms. Furthermore, I propose that variation in life expectancy is a proxy for time dilation. Therefore, I use a relativistic time concept to amend the Lucas Paradox and show that current methods of explaining the paradox might gravely underestimate its magnitude.

Bitcoin a definicja i funkcje pieniądza

The appearance of bitcoin is the beginning of a new era in which advanced technological capabili- ties have changed the perspective on the financial system's functioning rules and have expanded the understanding of the category of money. Bitcoin is used in commercial transactions, transfers and as an investment asset. The establishment of bitcoin is a part of the movement away from cash transactions and the general acceptance of non-material form of money observed around the world. The aim of the study is to analyse the bitcoin cryptocurrency in the scope of the fulfilment of the definition criteria and functions of money formulated in an economic theory, and to present the current legal situation in selected countries relating with its functioning.

Assessment of sediment contamination and sampling design in Savona Harbour, Italy

A method for assessing environmental contamination in harbour sediments and designing the forthcoming monitoring activities in enlarged coastal ecosystems is proposed herein. The method is based on coupling principal component analysis of previous sampling campaigns with a discrete optimisation of a value for money function. The objective function represents the utility derived for every sum of money spent in sampling and chemical analysis. The method was then used to assess actual contamination and found to be well suited for reducing the number of chemicals to be searched during extended monitoring activities and identifying the possible sources of contamination. Data collected in Savona Harbour (Porto Vado), Italy, where construction of a new terminal construction is planned, were used to illustrate the procedure. 23 chemicals were searched for within a total of 213 samples in 68 sampling points during three monitoring campaigns. These data were used to test the procedure. Subsequently, 28 chemicals were searched for within 14 samples in 10 sampling points and collected data were used to evaluate the experimental error and to validate the proposed procedure.

The Currency's Internationality: Concept Advances for Understanding Currencies Beyond Borders

International currency is a common term in the economic literature. Notwithstanding, it carries numerous connotations and blurs itself among words such as reserve currency, invoice currency and regional currency. This lack of conceptual precision undermines the consolidation of the knowledge about currencies in the international economic scenario. Based on the traditional economic discussions on money functions and the most recent issues on state sovereignty, we formulate a sufficiently flexible framework to both cope with the wide range of international economy inquisitiveness and to be sufficiently rigorous as it is mandatory for good science. We purpose internationality as the currency’s property of having its money functions acknowledged beyond the jurisdictional territory of its issuing monetary authority, allowing us to present an international currency as the one with sufficient internationality.

Economic uncertainty, monetary uncertainty, and the demand for money in Thailand

Economic uncertainty reflected in the volatility of real GDP and monetary uncertainty reflected in the volatility of nominal monetary figure such as M2 are said to induce people to change their portfolio and reallocate their assets between cash and other financial assets. Either uncertainty could make public more cautious and therefore, hold more cash and less of other assets. On the other hand, to hedge against uncertain prices, public may hedge by holding more real less risky assets and less cash. We test these hypotheses by including a measure of output uncertainty and a measure of monetary uncertainty in the demand for money function in Thailand. Using bounds testing approach we find that both measures of uncertainty do have short-run as well as long-run effects on the demand for cash balances.

Virtual Currency Bitcoin in the Scope of Money Definition and Store of Value

Abstract In spite of the fact that a lot of virtual currencies have been created in recent years, bitcoin is the best known from all of them and regularly reported in the news. Currency without identified creator is appreciated by its user for non-centralized running, without any chance of governments to influence the money supply. The advantages of bitcoin, such as very quick payments worldwide, stop of inflations caused by governments trying to solve their own problems or high level of transactions privacy are widely mentioned. The aim of the article is not to describe the technical issue of bitcoin and explain how this system works, because it has been widely explained in other articles. The aim is focusing on economic aspects of bitcoin, the technical aspects are mentioned only if necessary. For accomplishing the aim the article is split in two parts. The first part is dedicated to answering the question “What is bitcoin?”. It examines whether bitcoin complies with theoretical, empirical and law definition of money. The law definition of money compliance is done for Czech, German and EU law in general, but attitudes of US and Chinese governments are also mentioned. According to the findings, bitcoin cannot be easily considered as money. The second part is focused on store of value money function. Better store of value in comparison with fiat currencies should be important advantage of bitcoin. This function examination is based on volatility calculation for bitcoin and other currencies and assets. Comparing of results shows that volatility (and therefore risk) of bitcoin is significantly higher than of other currencies and assets.

Why is there Money? Or yet a new attempt at solving the Hahn Problem

In any civil society, at whatever stage of its political, social and economic development, money is one of the most crucial instruments used in the coordination process between agents and between agents and their government. As a matter of fact, even Rousseau’s mythical “noble savage” or Smith’s “rude and primitive societies” could not function without recognizing at least the unit-of-account function of money. In today’s complex societies, in its multifarious financial forms, money has acqui...

What money wants: an economy of desire

One thing all mainstream economists agree upon is that money has nothing whatsoever to do with desire. This strange blindness of the profession to what is otherwise considered to be a basic feature of economic life serves as the starting point for this provocative new theory of money. Through the works of Karl Marx, Thorstein Veblen, and Max Weber, What Money Wants argues that money is first and foremost an object of desire. In contrast to the common notion that money is but an ordinary object that people believe to be money, this book explores the theoretical consequences of the possibility that an ordinary object fulfills money's function insofar as it is desired as money. Rather than conceiving of the desire for money as pathological, Noam Yuran shows how it permeates economic reality, from finance to its spectacular double in our consumer economy of addictive shopping. Rich in colorful and accessible examples, from the work of Charles Dickens to Reality TV and commercials, this book convinces us that we must return to Marx and Veblen if we are to understand how brand names, broadcast television, and celebrity culture work. Analyzing both classical and contemporary economic theory, it reveals the philosophical dimensions of the controversy between orthodox and heterodox economics.

‘Whatever it takes’: Polanyian perspectives on the eurozone crisis and the gold standard

The parallels between the monetary politics of the gold standard and that of the eurozone crisis are striking and have informed contemporary debate about the future of European integration. The eurozone crisis has been widely interpreted as the result of a mismatch between international monetary integration and a concomitant lack of fiscal integration, or more broadly as the result of a European Union which is economically integrated, yet politically fragmented. The prospect of a 1930s-style descent into division and nationalism has formed the backdrop against which moves towards extensive integration at the supranational level have been made. Polanyi diagnosed the political effects of monetary integration through his analysis of the gold standard system in The great transformation, making it important that we unpack his analysis and consider carefully how a Polanyian perspective might apply to the eurozone today. I argue that Polanyi encourages us to look beyond ‘monetary vs. fiscal’ and ‘economic vs. political’ characterizations of European integration, and instead to examine how such oppositions are formed in the first place and how they constrain political debate, particularly in terms of how ‘sound money’ is established as the highest policy concern. Through a re-reading of Polanyi's distinction between ‘all-purpose’ and ‘special-purpose’ money, I highlight how, despite the huge efforts undertaken to preserve the identity of the euro as an all-purpose currency, the eurozone crisis has rendered visible a series of latent conflicts between the different functions of money. This analysis moves us away from the ‘monetary vs. fiscal’ integration view of the eurozone crisis and towards a more open study of how the various possible purposes of money are being articulated and challenged, offering some limited hope for alternatives to the current eurozone policy agenda.

KONSEP UANG MENURUT AL-GHAZALÎ

Al-Ghazalî is known as an intellectual figure who mastered various sciences. Almost all the religious aspects he studied in depth, including the issue of money. The learning process he did until he died. In the field of Islamic knowledge, there are proof which show many scholars who admitted to his mastered knowledge with tremendous enthu­siasm. This paper is presented to describe the thought of al-Ghazalî, such as the under­stan­­ding of money, the concept of money, the kind of money, the function of money, and the contribution of money to the Islamic economic system. The sources of data in this paper takes a lot from the phenomenal book of al-Ghazalî, namely Ihya al-‘Ulûmuddîn, as well as from other books related to this paper.

Problems of Overcoming Market Failures in the Context of Economic Crisis in the Euro Area

The article analyses the manifestations of a market failure problem revealed during the economic crisis in the euro area, namely business cycles, market inability to ensure money circulation and avoid inflation. It is shown that the cyclicity of economic development has revealed in various degrees of economic contraction and different rates of its recovery. These differences have been exacerbated by the new procyclical factors emerged from the transition to a single currency. As for money circulation the crisis has almost no impact on the single currency functioning: the euro has maintained its position on the world market and properly performed money functions in the domestic. The goal to achieve economic development without inflation in the euro area generally has been solved successfully by the European Central Bank (ECB). However, due to the fact that the ECB in its monetary policy does not pay sufficient attention to the increased inflation in small and relatively poor countries, the crisis has been more acute in them than in large countries with low inflation. The goals of ensuring money circulation and avoiding inflation can be settled more effectively in the euro area in case of more tight coherence in economic policy and strengthening of supranational mechanisms of economic governance.

Time Construction in Insurance Society

AbstractThis article deals with the social meaning of insurance contracts in the late medieval and modern society. Starting from the empirical analysis of one of the early marine insurance contracts which were stipulated in the second half of the 14th century, the hypothesis is suggested that the premium rate coincides with the estimated average frequency of sea accidents. By means of a proto‐probability calculus, rate was used by the early insurers for trading risks. Therefore the main thesis arises that insurance premium is a way of giving a certain price to the uncertainty of the future and that it indeed represents the cost of such observation. A comparison with the original function of money in primitive societies based on reciprocity is finally developed in order to explain how time construction is contingent on social structures.

The Evolution of Liquidity

To define liquidity this paper resorts to money functions and identifies confidence and financial innovation as factors of liquidity. Economic agents pile up money for its store of value function and invest (in accordance to their risk profile) to earn some return. Issuers of credit instruments and shares look for money for its medium of exchange function to achieve investments, pay debts and consume. Landing and investment can be viewed as a transformation process of store of value money function into its medium of exchange function. Hence liquidity can be interpreted as the ease of this money function transformation process which gives rise to debt and equity and dependent on agents’ confidence in the retransformation of debt and equity into cash. A great fraction of financial innovation aims to make this retransformation more secure by creating and maintaining confidence in originated private debt and financial institutions itself. At the beginning of its development liquidity primarily means money history, later bank history and nowadays it means the complexity of markets, technological progress, financial and capital market services. This paper endeavours to present this evolutionary process of liquidity and motivate the use of money functions in defining liquidity.

Wixle: An Elastic Digital Currency

Inspired by the great thinkers Knut Wicksell, Friedrich Hayek and Eugene Fama, I propose a pure inside credit money that is elastic and responds to demand automatically. Wixles could serve all the functions of money, pay interest, and not be tied to an external currency or commodity.

Fiscal Austerity and Quantitative Easing: A Modern Monetary Critique of the Mainstream Neoclassical View

Only by having a proper understanding of the function of money and finance in the economy can we hope to correctly inform decision making in monetary and fiscal policy. This paper will argue that neoclassical economics fails to do this, which results in suboptimal decision making from policymakers.This paper will examine the origin and ontology of money with particular reference to the difference between fixed or commodity-based views of money on the one hand and more credit-based theories on the other. This will lead to a better understanding of the development of neoclassical theories of economics, where money is seen as fixed or neutral and simply facilitating exchange. I propose that a better theory is a heterodox theory of money and economics in which the credit-based nature of money is key to understanding the role of credit it in the economy.In particular this paper will look at two areas of policy currently prevalent in economies that are suffering weak growth post the Global Financial Crisis. These are Quantitative Easing (QE) and Fiscal Austerity. The paper will analyse data from the economies of countries that have engaged in these policies in an attempt to establish the success or otherwise of the policies.Furthermore, the paper will attempt to evidence my view that by applying theories from outside the mainstream schools of economics, such as the Modern Monetary School, we can better understand the failure of these policies to return economies to trend rates of growth and employment.

Symbolic Economies: Money, Neoliberal Law and National Politics in Argentina

In this article, I examine Argentina's neoliberal reforms throughout the 1990s from a Marxist theoretical perspective, analysing how money, monetary policy and law constitute a fundamental mode of ideological regulation in neoliberal capitalism. Situating this analysis in the context of the capitalist crisis of the mid-1970s, the article discusses the politics of effacement that in Argentina's case paved the way for the use of monetary policy as a form of social control intended to embed the nation-state into global capitalism. Examining economic legislation, macro-economic policies, political ideologies, consumer discourses and pension privatization, I analyse how the neoliberal monetary regime ideologically underpinned a whole state imaginary based on exchange rate parity with the US dollar. Further, I investigate the ideological function of money in symbolically reordering the relationships of workers and citizens to the state, capital and culture. The article concludes with an exploration of the political significance of the monetary collapse of the Argentine neoliberal reform in 2001–2002, comparing Argentina's crisis of hegemony with that of other states within global capitalism.

Using Russian Ruble in International Transactions

The article deals with topical issues in international relations of the Russian Federation on the basis of the increased use of the ruble as the currency contracts and payments. The work shows the coordinated support of economic actors, public institutions of countries-partners. Collaborate with international teams, according to the author of the article, the implementation of economic programs of mutual interest and reinforces the trend of creating a multipolar world. The analysis of problems of development cooperation partners countries in the monetary sphere and shows that the main causes hindering greater use of domestic currencies are: hard currency regulation; a rare use of letters of credit and guarantees, which increases the financial risk operations; significant transaction costs; asymmetrical measures, currency regulation, burdening the mutual interests of the parties. To expand the use of the ruble in international relations author offers take into account a number of factors, including the need for a priority international currency contracts to perform the basic functions of money abroad is a measure of the value, means of payment and means of hoarding. The author's position is presented about the prospects of State institutional policy. In particular, the conclusion: the experience of Bulgaria, Romania, Albania has shown that the main task of the departments responsible for implementing the monetary policy should be the containment of inflationary pressures associated, including overdue contributions to the budget. A key priority in such circumstances is to support solvent and transparent banking systems, which are the basis for international cooperation.

Banking and business of interest in Early times of India (Special reference with inscriptions & dharmasastras)

kautilya attests to their function of money- lending when he says, King's spies disguised as merchants may borrow from corporations bar gold and coined gold for various kinds of merchandise to be procured from abroad no hint is available from arthasastra that the guilds were functioning as banks for the public in general. Kautilya mentions some extra qualities which were necessary for a guild to function as bank. This shows that not all the guilds were capable to function as banks. The receiving guild was expected to relieve misery it also points to the fact that the guilds had to be necessarily wealthy in order to be in a position to render help by making advances on interest. It is also likely that some fee was charged from those who received instruction.The guild should enjoy the confidence of other guilds. This point is significant as financial matters could only be entrusted to reputed institutions. The receiving guild should also be adequately competent to undertake any artistic work expected from it. We have seen till now how deposits, pledges mortgages and endowments were made in various places by different persons from time to time. In all such transaction, interest always played a prominent if not the most important role. The levying and recovery of interest have been two of the most vital functions of banking in India from early ages. Interest ware one of the essential factors between debtors and creditors in their various transactions. The welfare of the Kingdom depends on the nature of such transactions they should always be scrutinized.

Economic nature of money as an object of civil rights

Problem setting. In general, scientific attention is paid to the bipolar nature of money, which is shown in the economic origin and legal stipulation of their existence. That is why, before considering money as a legal category, we need to pay attention to their economic specifics. Recent research and publications analysis. The issue at different times were explored by such scholars as J. M. Keynes, K. Marx, K. L. McConnell, S. L. Brue, I. Fischer, M. Friedman, A. Hayek, P. P. Tsitovich, L. A. Luntz, G. F. Shershenevich, A. S. Galchinskiy, O. V. Sokolova, S. A. Tchernetsov, G. N. Beloglazova, L. A. Novoselova. Paper objective. The objective of the paper is the clarification of the economic nature of money as an object of civil rights and detection of economic and legal connections in the considered object. Paper main body. Economic nature of money usually appears in the definitions offered by various scholars. Money is defined as allowable mean of exchange, which is accepted in exchange for goods and services and can be used for the accumulation of wealth and future use. According to the dominated approach in the western economy, money is something that performs the functions of money. Today, the functional approach is the priority for determining the economic nature of money. 2 Conclusions of the research. Thus, it can be concluded that the economic nature of money is determined by the functions they perform in property turnover. Based on the economic functions of money, we can set the basic direction of the influence of money in the law in general and civil law relations in particular. Abstract. The article is devoted to the analysis of the economic segment in the doctrine of money as the object of civil rights. The main approaches to determining the economic substance of money are examined, especially functional approach, which was approved by the economic and legal science. Key words: money, the economic nature of money, the economic functions of money, civil law functions of money.