Skip to main content

Questions tagged [money]

any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context, or is easily converted to such a form. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, sometimes, a standard of deferred payment. Any item or verifiable record that fulfills these functions can be considered as money.

42 questions with no upvoted or accepted answers
Filter by
Sorted by
Tagged with
4 votes
3 answers
228 views

Real Income and a Fixed Money Supply

What would happen to nominal income and wages if the money supply were fixed (100% reserve banking). Would real wages increase, even though nominal wages would stay the same or even decrease?
Setrotoxin11's user avatar
4 votes
0 answers
80 views

How Africans use their wages?

I was researching poverty in Africa and was reading about their daily wages. Based on the article linked, 2/3 of Africans live on less than $1.25 USD, a day. However, what this article and many ...
F16Falcon's user avatar
  • 141
3 votes
0 answers
27 views

Is the viability of a limited supply currency dependent on the equality or inequality of its distribution among potential users?

Presumably, the more unequal the distribution of a limited supply currency among potential users, the more advantage early accumulators have vs latecomers; as soon as the early accumulators begin to ...
Hieronymus Larsson's user avatar
3 votes
0 answers
20 views

Is there a clear timeline of ECB/Eurosystem's changes to the defintion of M3 (with regard to repos)?

I found that circa 2012 the ECB/Eurosystem changed their definition of M3 to exclude at least some repos, which previously were included. According to a 2014 Bundesbank publication, the change ...
got trolled too much this week's user avatar
3 votes
0 answers
7k views

Did the robbers from Money Heist real steal noone's money?

Money Heist (original Spanish title: La Casa de papel) is a Spanish TV show about a bank heist. From Wikipedia (bolding mine), In Money Heist, a mysterious man, known as "The Professor", is ...
Taladris's user avatar
  • 240
2 votes
0 answers
31 views

What is sound money? Is it a well-defined concept within economics?

I see many broad definitions of what 'sound money' is. I also see it used as adjective. Is there a universal definition, and is the concept ubiquitous within economics?
StatsScared's user avatar
2 votes
1 answer
5k views

Effect of risk premium on the money demand (LM curve)

In short, I'm having problems understanding the LM curve, as the explanation given by the picture is for me, the 4th row is counter intuitive. When risk premium increases it causes the interest rates ...
user avatar
2 votes
0 answers
265 views

Friedman's version of money multiplier formula

In his Quantity Theory of Money article M. Friedman uses the following formula for the money multiplier: $$ M = H \times \frac{\frac{D}{R}(1 + \frac{D}{C})}{\frac{D}{R}+\frac{D}{C}} $$ where $M = $ ...
zer0hedge's user avatar
  • 261
2 votes
0 answers
138 views

Money in New Keynesian models

I have been doing some reading on general equilibrium theory and it has made me highly confused regarding the logic behind NK models. If I have understood correctly, NK models are based on Walrasian ...
user11767's user avatar
  • 661
2 votes
0 answers
36 views

Sources of the endogeneity of money in New Keynesian economics (Woodford)

I am trying to wrap my head around Woodford's "Interest and Prices" so I have a question regarding the source of the endogeneity of the money supply in his models. The Post Keynesian view is that ...
Aleksander's user avatar
2 votes
1 answer
65 views

How much money is needed when creating a new hypotethical country?

If a new country is to come to existence as a thought experiment, what determines the amount of money that would be needed to bootstrap economic activities? This question is more of a prodding ...
Finlay Weber's user avatar
2 votes
1 answer
110 views

Can the US dollar collapse and what are steps that I should take in the event that this happens?

A friend of mines says that the US dollar is so "heavily intertwined" in other nations that if the US Dollar was to become worthless then that would have a major impact on the world. However with ...
Jacob David C. Cunningham's user avatar
1 vote
1 answer
69 views

When a currency is redenominated, do people with a lot of it lose?

When a currency is redenominated, for example 1,000,000 = 1, which is done in response to hyperinflation due to government abuse of moneyprinting, do the people with a lot of the currency lose? For ...
economics's user avatar
  • 111
1 vote
0 answers
46 views

In the Diamond-Dybvig model, why does the long-term investment not offer a liquidity risk premium?

In the basic version of this model (see link below), both the short-term asset (deposit) and the long-term investment (“technology”) are considered to be risk-free (that is, there is only one possible ...
Leonid Konoplev's user avatar
1 vote
0 answers
44 views

Contractionary monetary policy to tame inflation. Paradox?

One of the consequences caused by high inflation is lower economic growth. The central bank, by contractionary monetary policy, increases interest rates in order to decrease aggregate demand and lower ...
user42354's user avatar
1 vote
0 answers
20 views

Question about surplus/excess supply

My question is regarding the problem in the image above. As you can see, it says that if I have 300 tons priced at 150 dollars per ton, I should lower my price to the equilibrium price of 100 dollars ...
Anthony Fallone's user avatar
1 vote
0 answers
23 views

Money-market model: Income rises, bond prices fall. But if income rises, saving increases — in bonds. So why does rising income lower bond prices?

According to the money market model that determines the equilibrium interest rate at which the demand for money in the economy equals the supply of money: when the money demand curve shifts right for ...
Oikosmonaut's user avatar
1 vote
0 answers
70 views

What would happen in global bank run

Bank runs are self-amplifying. What would realistically happen if the entire earth would experience a simultaneous bank run?
matthias_buehlmann's user avatar
1 vote
0 answers
62 views

When a country is banned from using SWIFT, what alternative ways do banks within that country still have to transfer or receive money from abroad?

If Russia invades Ukraine one of the sanctions that the west might impose is banning the banks in Russia from the SWIFT network. I've watched a short video from a financial news channel that explains ...
Maurice's user avatar
  • 113
1 vote
0 answers
58 views

Who first described/coined “velocity” of money?

Restatement: Who is responsible for originating the term “velocity” to describe the rate of money circulation? Also, who is responsible for first discussing this rate, specifically? Background: While ...
Dio's user avatar
  • 11
1 vote
0 answers
30 views

How online payment services system work?

Nowadays, online payment services like Transferwise, Payoneer and Paysera have been widely used. It enables people outside US to receive payment from companies. These services gives you a bank account ...
Abdulrahman Mohamed's user avatar
1 vote
0 answers
27 views

Question on Dichotomous system

In The Classic economy, we consider the following macroeconomic model $$Y=F(K,N)$$ where $F_N>0$, $F_K>0$, $F_{KK}, F_{NN}<0$ and $F_{NK}>0$ $$F_N(K/N)=w/p$$ The labor supply function is $$...
studentp's user avatar
  • 172
1 vote
0 answers
31 views

What is the impact of money "sent" to another country?

I've been thinking about this a lot and I am not sure I have understood correctly. I was thinking about, for example, migrant workers who send a portion of their income back home, or wealthy ...
Luke's user avatar
  • 211
1 vote
0 answers
31 views

Why is money used in transactions when it is dominated as a store of value?

In Lectures on Macroeconomics by O.Blanchard and S.Fisher (1993) stated that (the emphasize is mine): Building a model that formally explains why money is used in transactions when it is ...
zer0hedge's user avatar
  • 261
1 vote
0 answers
114 views

Effects of variables on the demand for money?

I need verification on my understanding as to whether the following factors affect the demand for money, and if so how they affect it: Changes in Nominal National Income: will affect the transactions ...
tsp216's user avatar
  • 675
1 vote
0 answers
63 views

What is the "natural rate of interest" vs. "money interest rate"?

What exactly is the distinction that Knut Wicksell made in his Interest & Prices between "natural rate of interest" or "natural interest" ("der natürliche Kapital zins") and the "money rate of ...
Geremia's user avatar
  • 471
1 vote
0 answers
54 views

A country with dual payment system

Is there any country with dual domestic payment system? For instance, in the USA there are CHIPS or Fedwire both help wire transfer of USD within the USA. They give services to international ...
user9386's user avatar
  • 111
1 vote
1 answer
69 views

How does the private bank reserve increase when money is being withdrew?

The federal government raises 400 million by selling bonds to the general public in order to pay for a construction program. The program cost 440 million so the government withdraws 25 million from ...
Long Vuong's user avatar
0 votes
0 answers
13 views

Savings when money market is in equilibrium (LM curve in IS-LM model)

When the money market is in equilibrium, supply of real money balances is equal to the money people hold in hand as liquidity, right? Which means entire real money balance is at hand as liquidity (...
Nipuna Saranga's user avatar
0 votes
0 answers
43 views

What is liquidity of dollars?

I read Russian article about exported inflation and it was written there about liquidity of dollars: In order to reduce national debt of the USA and to stimulate economic growth government of USA ...
Mike_bb's user avatar
  • 143
0 votes
0 answers
9 views

can the amount of cash reserve ratio reserve bank of india gives back to banks or not

one instrument we have learnt like Cash reserve ratio . supoose crr is 4% and one person deposit 100 rupee in bank. now the crr is 4 it means out of 100 rupees 4 will go to rbi .my question is . can ...
Dheeraj   singh 's user avatar
0 votes
0 answers
45 views

Does money function like a systemic form of energy?

First let me say that I'm an MD with a background in science, not economics. Recently, physicist Geoffrey West discovered that the same allometric scaling laws that have been known about in biology ...
Asklepian's user avatar
0 votes
1 answer
84 views

Does an increase in money demand lead to an increase in demand for loanable funds?

Does an increase in money demand lead to an increase in demand for loanable funds? If so, what is the mechanism behind the change?
antifreeze's user avatar
0 votes
1 answer
141 views

Money transfers from A to B - in what proportions

I have been thinking about how money is kept moving, being transferred from A to B. And when I say A to B I don't just mean purchasing finished goods, I mean absolutely any transfer for any reason. So ...
Mick's user avatar
  • 1,046
0 votes
0 answers
24 views

Has anyone developed a good methodology for high-frequency inflation nowcasting?

Let's say I want to know what happened to the value of the U.S. dollar between three minutes and two minutes back from ... NOW. I have given myself a two minute slack period for data collection and ...
andrewH's user avatar
  • 345
0 votes
0 answers
99 views

What happens if a country omits the zeros of it's current money?

I mean, for example, the government changes all x10000 to x1; where x equals to currency of the respected country (Dollar, for instance).
elyar abad's user avatar
0 votes
0 answers
31 views

What would be the costs of declaring/legislating that Scottish banknotes be legal tender?

Bank of England: English banknotes aren’t legal tender in Scotland. Scottish notes aren’t legal tender in England or Scotland. Committee of Scottish Bankers: Scottish Bank notes are not Legal ...
user avatar
0 votes
1 answer
44 views

What would happend if the total quantity of money get fixed?

I was wondering what would happend if the total amount of money get fixed in an scenario were there is not exchange of good and services between countries markets. I think maybe the fact that prices ...
Daniel Muñoz's user avatar
0 votes
1 answer
105 views

Is there a reason why a producer wouldn’t start selling at a high price and then keep lowering until they’ve sold everything?

I know ideally a producer is supposed to sell the equilibrium quantity for the equilibrium price. But is there a reason why a producer wouldn’t produce a quantity higher than the equilibrium quantity ...
Anthony Fallone's user avatar
-1 votes
1 answer
151 views

Would taxing money owned (as a share of purchasing power) be a better form of taxation?

Consider a nation whose money is entirely digital (like Bitcoin), but centralized (unlike Bitcoin). Furthermore, the total money supply is fixed, i.e. money cannot be created nor destroyed. To be ...
Félix Poulin-Bélanger's user avatar
-1 votes
1 answer
65 views

Why don't we mint more m0 instead of creating m1 through fractional reserve banking?

From what I understand, m1 money is just as liquid as m0 since an individual can withdraw it from the bank at any time and in any quantity (up to the amount (s)he deposited). Because of this I don't ...
Jonah's user avatar
  • 343
-1 votes
1 answer
52 views

Post-Keynesian theory and households?

"money must be introduced as part of the production process. Such a process is inherently dynamic, as entrepreneurs in each period must produce a new flow of commodities.” and households have no ...
emma's user avatar
  • 1