ABSTRACT
No economy, whether based on public or private ownership, could work efficiently without a medium of exchange. At the most primitive level, goods and services may be exchanged for each other directly, but, unless each party to a transaction happened to wish to acquire precisely those articles that the other has to offer, the disadvantages of such a procedure are overwhelming. In any complex pattern of trading, money, defined as an acceptable medium of exchange, is indispensable. If money is to be an acceptable medium of exchange it must also be an effective store of purchasing power. As no one is likely to receive payments at precisely the same times, and of precisely the same amounts, as he has to make them, money will have to be carried over from one time to another; this people will be prepared to do, however, only if money has a reasonably stable value in terms of goods.
