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Money, Prices and Payments in Planned Economies

  • Michael Ellman
Living reference work entry

Later version available View entry history

Abstract

This chapter is an account of the role of money in planned economies, which sets the subject in both theoretical and historical frameworks. Theoretically, money in planned economies is considered to fit into the state theory of money. Historically, the changing role of money, from hyperinflation to monetary stabilization, to the initial stages of the administrative-command economy, to monetary reform, to stable money, to chronic shortageflation, to acute shortageflation and loss of monetary control, is surveyed. Attention is paid both to the similarities (medium of exchange, unit of account) and to the differences (passive money, partial equivalence, role of the banking system) between money in planned economies and money in capitalist economies. It is concluded that cash money in planned economies was an instrument, analogous to propaganda or repression, to incentivize the population to work hard to achieve the goals of the national leadership, and that noncash money was an instrument to facilitate and check plan fulfillment.

Keywords

State theory Passive money Partial equivalence Shortageflation Chartalism 

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Copyright information

© Springer Nature Singapore Pte Ltd. 2018

Authors and Affiliations

  1. 1.Faculty of Economics & BusinessUniversity of AmsterdamAmsterdamThe Netherlands
  2. 2.Cambridge Journal of EconomicsCambridgeUK

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