It's the key to free market capitalism, she said, with money the unit of account
that provides clarity on pricing.
The similarity is in the fact that crypto currencies can be used as a medium of exchange, a unit of account
and a store of value.Using a crypto currency such as bitcoin, one can buy goods (medium of exchange), at a given price (unit of account
), using funds from their crypto wallets (store of value).
Viable monies provide a reliable means of payment, unit of account
, and store of value.
These digital currencies fare poorly on all three measures critical for the wider acceptance of any currency--be it a medium of exchange, a store of value or a unit of account
President Nicolas Maduro ordered banks to adopt the petro cryptocurrency as a unit of account
. The move comes as the nation is struggling under a political and economic crisis.
Economists identify money as a verifiable asset that serves as a medium of exchange, a unit of account
and a store of value.
The starting point for the policy I am advocating is to encourage economic actors to use the electronic dollar--or euro, yen, pound, peso, etc.--as the unit of account
, and as the unit in which prices are expressed.
Money is supposed to serve three purposes: it functions as a medium of exchange, a unit of account
, and a store of value.
* Matthias Doepke, Northwestern University and NBER, and Martin Schneider, Stanford University and NBER, "On the Optimality of a Dominant Unit of Account
To ensure a determinate price level, the government has only to provide a unit of account
and require that prices are quoted in terms of it.
The idea of an inflation-proof unit of account
is not itself a novel idea - the grand old man of English economics, Alfred Marshall, suggested it more than a century ago, and in Chile it actually exists.
Economists remind us that money serves three functions: a store of value, a unit of account
and a transaction mechanism.