Fundamentals of Economic Analysis: A Causal-Realist Approach

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9. Money and Prices

  • Fundamentals of Economic Analysis

Etiquetas Dinero y BancosIntroducción a la Economía AustriacaFilosofía y MetodologíaPrecios

06/15/2007Joseph T. Salerno

In the history of money, bartering was awkward because wants were not divisible. Direct exchange depended upon a double coincidence of wants. Demand for a medium of exchange grew until a general medium of exchange emerged, like gold and silver.

A medium of exchange should display these characteristics: must be generally acceptable, widely demanded for non-monetary uses, easily portable, homogeneous, highly divisible and highly durable.

Although it is beneficial to have more of any other commodity, it is not true of money. A greater supply of money merely dilutes the purchasing power of each money unit. The consequences of inflation include a rise in prices, a fall in purchasing power, and a stealth tax on citizens.

The ninth in a series of ten lectures, from Fundamentals of Economic Analysis: A Causal-Realist Approach.

9. Money and Prices | Joseph T. Salerno


Contact Joseph T. Salerno

Joseph Salerno is academic vice president of the Mises Institute, professor emeritus of economics at Pace University, and editor of the Quarterly Journal of Austrian Economics.

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