Currency Baskets as International Units of Account

H.C. Wolf

Working Papers from New York University, Leonard N. Stern School of Business, Department of Economics

Abstract: Monetary textbooks customarily define money by its three properties as a means of transaction, as a unit of account and as a store of value. It is vast preponderance of domestic exchanges, a single unit-the legal tender serves to fullfill the first two functions: the prices are quoted in units of the local currency and transactions are consummated using concrete or electronic tokens denominated in units of the same curency. The use of a single unit for both objectives primarily reflects evoilutionary convenience (Menger [1882], Simmel [1907]): the additional computational cost translating prices quoted in a separate unit of account into units of the means of exchange strongly suggestes the use of a single uit for expressing prices and undertaking transactions.

Keywords: CURRENCIES; INFLATION; MONETARY POLICY (search for similar items in EconPapers)
JEL-codes: E41 E42 E50 E52 (search for similar items in EconPapers)
Pages: 23 pages
Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:ste:nystbu:96-04

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