Defining Money

David Howden

A chapter in The Emergence of a Tradition: Essays in Honor of Jesús Huerta de Soto, Volume I, 2023, pp 159-178 from Springer

Abstract: Abstract Conventional wisdom has it that money is the commonly accepted medium of exchange. Although not incorrect, the statement obscures more than it illuminates. In this chapter I offer an alternative definition of money based on it being the financial asset that exchanges at par value on demand. From this I am able to outline under what conditions money emerges as a solution to the real economic problem of uncertainty. The result is that money also takes on the role of the generally accepted medium of exchange. The causal explanation provided herein sheds light on some oddities of monetary theory that traditional treatments of money do not easily address.

Keywords: Medium of exchange; Risk and uncertainty; Knightian uncertainty; Monetary theory; Unit of account (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-17414-8_15

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DOI: 10.1007/978-3-031-17414-8_15

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