Monetary Economics is a branch of economics that provides a framework for analysing money and its functions as a medium of exchange, store of value and unit of account. It examines the effects of monetary systems, including regulation of money and associated financial institutions. The chapter opens with Milton Friedman's words: "Inflation is taxation without legislation."
1. Money – Meaning and Definitions
Money is anything that is generally accepted as payment for goods and services and repayment of debts, and that serves as a medium of exchange. The use of credit instruments such as cheques has gone up, but money is the basis of credit.
| Economist | Definition of Money |
|---|---|
| Walker | "Money is, what money does" |
| Crowther | "Money can be anything that is generally acceptable as a means of exchange and at the same time acts as a measure and a store of value" |