ON THE HISTORICAL VALIDITY OF NOMINAL MONEY AS A MEASURE OF ORGANIZATIONAL PERFORMANCE: SOME EVIDENCE AND LOGICAL ANALYSIS

Stanley C. W. Salvary ()

Macroeconomics from EconWPA

Abstract: In the literature, nominal money has been decried as a reliable measure. However, before condemning money as a defective measure, it is necessary to examine in a historical context the nature and the role of money in a money economic system, and the changes over time in the types of money (commodity money versus paper money). Using historical evidence and logical analysis, this paper attempts to establish the validity of nominal money as a valid device for the measurement of organizational perfor mance. This paper reveals that: (1) the deficiencies of commodity money (and the historical arguments associated with it) are attributed to paper (fiat) money; (2) in a historical setting, there are very restrictive conditions under which paper money would be a defective measuring device; and (3) under general economic conditions, paper money is a reliable measure.

Keywords: organizing economic activities; commodity money; representative paper money; transaction cost reduction; extrinsic and intrinsic values; uncertain nominal value; non specified purchasing power; individual preferenc; stored entitlements. (search for similar items in EconPapers)
JEL-codes: E (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-his, nep-mac and nep-mon
Date: 2005-02-08
Note: Type of Document - wps; pages: 25
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpma:0502018

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