Money (for New Palgrave Money and Finance)

Among the conventions of almost every human society of historical record has been the use of money, i.e., particular commodities or tokens as measures of value and media of exchange in economic transactions. Somehow the members of a society agree on what will be acceptable tender in making payments and settling debts among themselves. General agreement to the convention, not the particular media agreed upon, is the source of money's immense value to the society. In this respect money is similar to language, standard time, or the convention designating the side of the road for passing. This paper reviews the history of various forms of money, the functions of money, and the role of money in economic theory.