The New Concept of Money: From Record-Of-Value (RoV) To Record-Of-Entropy (RoE)

Hegadekatti, Kartik (2016): The New Concept of Money: From Record-Of-Value (RoV) To Record-Of-Entropy (RoE). Published in: Monetary Economics: Financial System & Institutions eJournal , Vol. 01, No. 151 (14 December 2016)

Abstract

In this paper, we shall analyse the concept of Money. Presently money is viewed as Record-of-Value i.e. money is used to capture value created in any activity. We start by defining money. Then we discuss the way energy is spent in creating value is measured using money. We also assess the uses of money by viewing it as a Record-of-Value entity. We discuss about the parallel economy which impacts mainstream economy in various ways. Economic Entropy is then defined and discussed.

An equation that relates Economic Entropy, value based money and other economic parameters is proposed. The various advantages of viewing money as a Record-of-Entropy are debated. Finally, the paper concludes as to which concept is best suited to present day and future economic scenarios.

• Item Type: MPRA Paper
• Language: English
• Keywords: Money, Value, Entropy
• Subjects: C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C50 - General; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C51 - Model Construction and Estimation; C - Mathematical and Quantitative Methods > C8 - Data Collection and Data Estimation Methodology ; Computer Programs > C81 - Methodology for Collecting, Estimating, and Organizing Microeconomic Data ; Data Access; C - Mathematical and Quantitative Methods > C8 - Data Collection and Data Estimation Methodology ; Computer Programs > C82 - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data ; Data Access; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D46 - Value Theory; D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D51 - Exchange and Production Economies; P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P24 - National Income, Product, and Expenditure ; Money ; Inflation; P - Economic Systems > P4 - Other Economic Systems > P44 - National Income, Product, and Expenditure ; Money ; Inflation

References

[1] Mishkin, Frederic S. (2007). The Economics of Money, Banking, and Financial Markets (Alternate Edition). Boston: Addison Wesley.