Money and Uncertainty—an Introductory View

  • Paul Davidson


‘Money,’ Hicks has declared, ‘is defined by its functions … “money is what money does”.’1 Harrod notes that ‘Money is a social phenomenon, and many of its current features depend on what people think it is or ought to be’.2 ‘Money,’ Scitovsky adds, ‘is a difficult concept to define, partly because it fulfils not one but three functions, each of them providing a criterion of moneyness … those of a unit of account, a medium of exchange, and a store of value.’3


Money Wage Private Debt Monetary Theory Fractional Reserve Banking Temporary Abode 
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  1. 3.
    T. Scitovsky, Money and the Balance of Payments (Chicago: Rand, McNally, 1969) p. 1Google Scholar
  2. 4.
    See P. A. Samuelson, Foundations of Economic Analysis (Cambridge: Harvard University Press, 1947) pp. 122–4.Google Scholar
  3. 3.
    F. H. Hahn, ‘Some Adjustment Problems’, Econometrica, 38 (1970) p. 3.CrossRefGoogle Scholar
  4. 1.
    J. Tobin, ‘Notes on Optimal Growth’, Journ. Pol. Econ., 76 (1968) p. 833.CrossRefGoogle Scholar
  5. 2.
    M. Friedman, Dollars and Deficits (Englewood Cliffs: Prentice-Hall, 1968) p. 186.Google Scholar
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    M. Friedman, ‘A Theoretical Framework for Monetary Analysis’, Journ. Pol. Econ., 78 (1970) p. 223; also seeCrossRefGoogle Scholar
  7. M. Friedman, ‘Monetary Theory of Nominal Income’, Journ. Pol. Econ., 79 (1971) pp. 326–9.Google Scholar
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    H. Working, ‘New Concepts Concerning Futures Markets and Prices’, American Econ. Rev., 52 (1962) pp. 445–9.Google Scholar
  9. 2.
    See D. Patinkin, Money, Interest, and Prices, 2nd ed. pp. 44–5. Also Hicks, Critical Essays, pp. 9–10 and J. Tobin, ‘A Dynamic Aggregative Model’, Journ. Pol. Econ., 63 (1955) p. 105. Thus many modern neo-classicists are in essence providing a bootstrap theory of the price level of goods in place of a bootstrap theory of the price level of bonds.Google Scholar

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© Paul Davidson 1978

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  • Paul Davidson

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