The central role of money in an economy

Conventional economic theory treats the role of money as neutral (it does not affect the subjects it measures in terms of value. This is unscientific and very confused.

Marginal Factor Costs are "...expressed in currency units per units of input..." (wikipedia). This assumes that money is a "measuring rod" that is fixed (neutral/inert). Yet we should know that:
  • who creates the currency (that is, credit-money), who owns newly issued currency, how it gets into the economy (lent or spent), how much of it is created and/or transferred to foreign jurisdictions (invested abroad);
all these variables influence intimately how the monetary measure behaves.

Table of Contents

Page title Most recent update Last edited by
The central role of money in an economy October 15, 2012 3:54 PM Janos A.
About London Economics Debating Society December 22, 2010 12:22 PM former member

Sign up

Meetup members, Log in

By clicking "Sign up" or "Sign up using Facebook", you confirm that you accept our Terms of Service & Privacy Policy