Monetary system

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Jump to: navigation, search This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (April 2009) The topic of this article may not meet Wikipedia's general notability guideline. Please help to establish notability by adding reliable, secondary sources about the topic. If notability cannot be established, the article is likely to be merged, redirected, or deleted. (April 2009) A monetary system is anything that is accepted as a standard of value and measure of wealth in a particular region.[1] However, the current trend is to use international trade and investment to alter the policy and legislation of individual governments. The best recent example of this policy is the European Union's creation of the euro as a common currency for many of its individual states. Modern currencies are linked to physical commodities (silver or gold).

Contents
[hide]

1 Commodity money system 2 Fiat money 3 See also 4 References 5 External links and further reading

[edit] Commodity money system

A commodity money system is a monetary system such as the gold standard in which a commodity such as gold is made the unit of value and physically used as money, any other money, such as paper notes, being theoretically convertible to it on demand. An historical alternative which was rejected in the Twentieth Century was bimetallism, also called the "double standard", under which both gold and silver were legal tender.[2]

[edit] Fiat money

The alternative to a commodity money system is fiat money which is defined by a central bank and government law, or "fiat", which defines legal tender. Typically fiat money is paper currency or base metal coinage, but can also be simply data such as bank balances and records of credit or debit card purchases.

[edit] See also

International monetary systems Monetary economics Monetarism Money supply

1. ^ Reference.com, definition of "monetary system" 2. ^ Velde, Francois R., Following the Yellow Brick Road: How the United States Adopted the Gold Standard. Economic Perspectives, 4th Quarter, 2002. Available at SSRN: http://ssrn.com/abstract=377760 or doi:10.2139/ssrn.377760

[edit] References

[edit] External links and further reading

Velde, Francois R. "Following the Yellow Brick Road: How the United States Adopted the Gold Standard" Economic Perspectives. Volume: 26. Issue: 2. 2002. also online here This economic policy related article is a stub. You can help Wikipedia by expanding it. v d e

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Edit this pageMaybe later Categories: Finance Monetary economics Monetary reform Economics terminology Business terms Commerce Economic policy stubs Hidden categories: Articles needing additional references from April 2009 All articles needing additional references Articles with topics of unclear notability from April 2009 All articles with topics of unclear notability
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