TAILIEUCHUNG - Economics and Liberating Theory - Part 7

7 Money, Banks, and Finance A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain. Robert Frost It is ironic that money and banks top the list of economic subjects that most baffle and bore students. Money is just a clever invention to save time, and bankers, contrary to their stodgy reputations | 7 Money Banks and Finance A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain. Robert Frost It is ironic that money and banks top the list of economic subjects that most baffle and bore students. Money is just a clever invention to save time and bankers contrary to their stodgy reputations substitute bigamy for proper marriages between borrowers and lenders - with predictably disastrous consequences when both wives press their legal claims. Once finance is understood the Savings and Loan crisis of the 1980s international financial crises of the 1990s and early twenty-first century and the logic of monetary policy all fall quickly into place. MONEY A PROBLEMATIC CONVENIENCE It is possible to have exchange or market economies without money. A barter exchange economy is one in which people exchange one kind of good directly for another kind of good. For instance I grow potatoes because my land is best suited to that crop. My neighbor grows carrots because her land is better for carrots. But if we both like our stew with potatoes and carrots we can accomplish this through barter exchange. On Saturday I take some of my potatoes to town she takes some of her carrots and we exchange a certain number of pounds of potatoes for a certain number of pounds of carrots. No money is involved as goods are exchanged directly for other goods. Notice that in barter exchange the act of supplying is inextricably linked to an equivalent act of demanding. I cannot supply potatoes in the farmer s market without simultaneously demanding carrots. And my neighbor cannot supply carrots without simultaneously demanding potatoes. Having learned how recessions and inflation can arise because aggregate demand is less or greater than aggregate 160 Money Banks and Finance 161 supply it is interesting to note that in a barter exchange economy these difficulties would not occur. If every act of supplying is also an act of demanding an .

TỪ KHÓA LIÊN QUAN
Đã phát hiện trình chặn quảng cáo AdBlock
Trang web này phụ thuộc vào doanh thu từ số lần hiển thị quảng cáo để tồn tại. Vui lòng tắt trình chặn quảng cáo của bạn hoặc tạm dừng tính năng chặn quảng cáo cho trang web này.