
Contents
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4.1 Thing Value versus Money Value 4.1 Thing Value versus Money Value
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4.1.1 Intertemporal reallocation of value 4.1.1 Intertemporal reallocation of value
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4.1.2 Commercial bank money as a store of value 4.1.2 Commercial bank money as a store of value
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4.2 Other Theories of Money Value 4.2 Other Theories of Money Value
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4.3 Metallism 4.3 Metallism
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4.3.1 Gresham’s law 4.3.1 Gresham’s law
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4.3.2 Explaining metallic coin 4.3.2 Explaining metallic coin
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4.3.3 Metallic coin and international trade 4.3.3 Metallic coin and international trade
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4.3.4 Why maintain the metal content of coins? 4.3.4 Why maintain the metal content of coins?
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4.3.5 Metal content as a constraint on money creation 4.3.5 Metal content as a constraint on money creation
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4.4 Money as a Claim on Government 4.4 Money as a Claim on Government
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4.4.1 Central banknotes and government bonds 4.4.1 Central banknotes and government bonds
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4.4.2 Is money a credit claim? 4.4.2 Is money a credit claim?
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4.4.3 Private banknotes 4.4.3 Private banknotes
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4.4.4 Private banknotes backed by assets 4.4.4 Private banknotes backed by assets
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4.4.5 Central banknotes 4.4.5 Central banknotes
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4.4.6 Central bank money 4.4.6 Central bank money
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4.5 Money as a Risk-free Asset 4.5 Money as a Risk-free Asset
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4.5.1 Information insensitivity of money 4.5.1 Information insensitivity of money
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4.5.2 The unit of value as risk-free 4.5.2 The unit of value as risk-free
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4.5.3 The riskiness of near-money 4.5.3 The riskiness of near-money
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4.5.4 The riskiness of virtual currency 4.5.4 The riskiness of virtual currency
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Cite
Abstract
This chapter looks at money’s most fundamental attribute: it is perceived as something that has value. It should be reasonably clear that something which was not perceived as having value would by definition have none of the traditional characteristics of money—a unit of account, a medium of exchange, and a store of value. It is important to understand what it is that gives money value in order to answer the question of whether virtual currency can be said to be valuable in the same way. One approach to this topic is addressing the criterion ‘store of value’. The chapter argues that out of the three, it is the one which is least unique since almost any commodity can function as a store of value.
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