Sunday, 20 August 2017

Author Archives Alexander W. Salter

Money in Illiberalism

July 11, 2017

A liberal society is governed by the principles of private property and freedom of contract, under the aegis of a nondiscriminatory rule of law.  In such a society, money enables economic actors to coordinate their activities.  Money allows producers and consumers to find common ground, as profit-and-loss accounting enables producers to compare various lines of […]

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Money in Liberalism

June 19, 2017

One feature of a liberal society is that its institutions, and especially its formal institutions with coercive backing, are bound by a nondiscriminatory rule of law, and work to protect the sanctity of property and contract for all persons.  In such a society, the general laws of property, contract, torts, etc. govern the provision of […]

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The Institutional Character of Money

May 31, 2017

On the one hand, money is the language of commerce; money prices are the very medium of economic experience. On the other hand, there seems to be a deeper reality behind the monetary economy. In this scenario, real resource constraints, as described by Walrasian general equilibrium or Misesian evenly rotating economy, ultimately place bounds on […]

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Is Money Really a Veil?

May 11, 2017

My previous post was a crash course on the role of prices in a market economy.  Importantly, prices are money prices.  The vast majority of the time, producers accept the medium of exchange as payment for goods and services, and post prices denominated in the medium of exchange, which also makes the medium of exchange […]

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Let’s get back to basics. What is a price?

March 30, 2017

A price is an exchange ratio: you must give up a certain amount of one good in order to get another good.  Barter economies have prices, which are expressed as ratios of the goods themselves.  In money-using economies, prices are expressed in the economy’s medium of exchange, which frequently makes the medium of exchange the […]

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Nominal is Real; Real is Artificial

March 13, 2017

A basic tenet of macroeconomics and monetary economics is the difference between nominal variables and real variables. Nominal variables are expressed in current market prices. Real variables are adjusted to reflect the changing purchasing power of money over time (inflation or deflation). For example, the nominal interest rate is the rate that currently prevails in […]

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