Unemployment, inflation, economic growth, tassi di interesse, ecc. these are all terms that take up more and more space in newspapers and on the news.
The Macroeconomics studies these phenomena that affect the entire economic system and that affect the economic well-being of all citizens (in the different roles they played: consumatori, savers, etc..).
The goods and wages they buy and earn are measured in monetary units (transactions). So macroeconomics is also concerned with money.
Banknotes and coins (circulating) they are money that, considered a public good, in the macroeconomic system it plays a decisive role (as recognized and universally accepted) on prices, on rates and finally on real economic activity (with the associated benefits for the community).
Just read any text by Macroeconomics to find that coin, in an open and modern economy, performs three functions:
- A medium of exchange
It is used to settle bills regardless of the object of the purchase or sale.
- One unit of account
In fact, money acts as a reference for determining the prices of goods.
- A store of value
Money is a way of owning wealth (to consume or to accumulate)
Here is a further definition of the latter function:
"A store of value it is good (material or immaterial) which tends to retain its value over time, and for that reason it can be held for future use without the danger of it being “damage” – Def. Wikipedia.
It can therefore be concluded that money is accepted because it has intrinsic value (like gold for example) but also because the institution that emits it – the European Central Bank – enjoys a solid reputation.
Alex Gaetani
To inquire and learn more:
The functions of money and the proposals of “fiscal currency”
The Bank of Italy - Functions and objectives
What is money and what are its functions