Monetary economics

The neutrality of this article is disputed. Relevant discussion may be found on the talk page. Please do not remove this message until conditions to do so are met. (September 2018) (Learn how and when to remove this template message)

Monetary economics is the branch of economics that studies the different theories of money: it provides a framework for analyzing money and considers its functions (such as medium of exchange, store of value, and unit of account), and it considers how money can gain acceptance purely because of its convenience as a public good.^[1] The discipline has historically prefigured, and remains integrally linked to, macroeconomics.^[2] This branch also examines the effects of monetary systems, including regulation of money and associated financial institutions^[3] and international aspects.^[4]

Modern analysis has attempted to provide

The foundational concept of any modern theory of money is the understanding that the value of

• aggregated, in relation to economic activity^[10]
• Empirical determinants of the demand for money.
• Credit theory of money (also called debt theory of money), concerning the relationship between credit and money.
• business fluctuations through the wealth effect on net worth.^[11][12]
• Monetary aspects studied by central banks.^[13]
• The monetary/fiscal policy relationship to macroeconomic stability^[14]
• The effect of money supply growth on inflation.
• The political economy of financial regulation and monetary policy^[15]
• Monetary implications of the asset-price/macroeconomic relation:^[16] the quantity theory of money,^[17] monetarism,^[18] and the importance and stability of the relation between the money supply and interest rates, the price level, and nominal and real output of an economy.^[19]

• Monetary impacts on interest rates and the term structure of interest rates^[20]
• Lessons of monetary/financial history^[21]

• Transmission mechanisms of monetary policy as to the macroeconomy^[22]
• Neutrality of money vs. money illusion as to a change in the money supply, price level, or inflation on output^[23]
• Tests, testability, and implications of rational-expectations theory as to changes in output or inflation from monetary policy^[24]
• Monetary implications of imperfect and
  asymmetric information^[25] and fraudulent finance^[26]

• Game theory as a modeling paradigm for monetary and financial institutions^[27]
• Possible advantages of following a monetary-policy
  time inconsistency from discretionary policy^[28]

This section needs additional citations for verification. Please help improve this article by adding citations to reliable sources in this section. Unsourced material may be challenged and removed. (September 2018) (Learn how and when to remove this template message)

Islamic Golden Age

At around the same time in the

In the

The imperial

Until the middle of the 20th century, Tibet's official currency was also known as the Tibetan rupee.^[37]

Serious interest in the concepts behind money occurred during the dramatic period of inflation in the late 15th to early 17th centuries known as the

During the eighteenth century, the concept of banknotes became more common in Europe. David Hume referred to it as "this new invention of paper".^[38]

In 1705,

In 1720, Isaac Gervaise wrote The System or Theory of the Trade of the World. He criticised mercantilism and state-supported credit for the inflation problems of his era.^{[citation needed]}

Della Moneta, was published by Ferdinando Galiani in 1751, and is arguably the first modern text on economic theory. It was printed twenty-five years before Adam Smith's more famous book, The Wealth of Nations, which touched on some of the same topics. Della Moneta covered many modern monetary concepts, including the value, origin, and regulation of money. It carefully examined the possible causes for money's value to fluctuate.

The year following, 1752,