A dollar now than a dollar tomorrow.

Class notes for detailed info.

Money’s Role

  1. Solves the problem of the double coincidence of wants
    1. Observe the Edgeworth Box|420. This is a full barter system based on Indifference Curves.
  2. Functions as a claim on future consumption (=store of value, claim on future consumption)
    1. I give you the perishable food now ⇒ you give me a claim on future consumption.
    2. Discounting future value ← due to risk aversion and instant gratification (human psychology)

Sociology Perspective:

See (Article) Minimum Viable Superorganism Melting Asphalt

Money is industrial-grade prestige status

Time Value of Money

⇒ Thus arises the time value of money and financial markets

Properties Required in Physical Money

  1. Divisible ⇒ numerical money. You can divide it into as much as reasonable in transaction
  2. Scarce ⇒ gold/silver is often used
  3. Desirable ⇒ again, gold/silver.
  4. Durable ⇒ metallic goods

See the Gold Standard for more information