Skip to main content Accessibility help
×
Hostname: page-component-7c8c6479df-24hb2 Total loading time: 0 Render date: 2024-03-29T06:01:25.196Z Has data issue: false hasContentIssue false

Preface

Published online by Cambridge University Press:  05 July 2016

Jan Fredrik Qvigstad
Affiliation:
Norges Bank, Norway
Get access

Summary

“Money makes the world go around,” they sing in the musical Cabaret. The musical is dark and melancholic. The song's message is that money makes the world go around; not love, not having children and grandchildren – just money.

As economists we think otherwise. We think that money is not an end in itself. Money is the oil in the machinery that helps the economy to function. We think of money as the unit of account, just like distance is a unit of measurement. It would be meaningless to answer the question “How far is it?” with 110. One must add the unit of measurement, “yards” or “meters.” Money is useful as means of payment so that one can avoid returning to a barter economy. Money is also a store of value, creating a time gap between earning and spending to allow borrowing in the meantime, which facilitates investment. Money, however, only functions in an efficient way if there is trust and confidence. In early times money circulated in the form of coins, with a promised content of silver, copper, or gold. It was tempting to debase the coins and reduce or replace some of the silver with less valuable metals. When paper money came into use in the form of banknotes, it was tempting to produce too many of them, until their value depreciated and they could no longer be exchanged into the promised silver or gold content. Since the mid-nineteenth century, money has mainly been in the form of bank deposits. Trust is still critical, not least our trust in banks. As the economy develops and grows more sophisticated, so does money. In a modern society, it is inconceivable for the world to go around without money. Modern societies have delegated the task of safekeeping money to central banks.

On Central Banking contains six lectures given at the Norwegian Academy of Science and Letters. The lectures analyze different aspects of central banking but the questions raised could also be relevant for other institutions in society. The key words are trust and confidence.

Type
Chapter
Information
On Central Banking , pp. xxix - xxxiv
Publisher: Cambridge University Press
Print publication year: 2016

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Save book to Kindle

To save this book to your Kindle, first ensure coreplatform@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

  • Preface
  • Jan Fredrik Qvigstad
  • Book: On Central Banking
  • Online publication: 05 July 2016
  • Chapter DOI: https://doi.org/10.1017/CBO9781316584682.002
Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

  • Preface
  • Jan Fredrik Qvigstad
  • Book: On Central Banking
  • Online publication: 05 July 2016
  • Chapter DOI: https://doi.org/10.1017/CBO9781316584682.002
Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

  • Preface
  • Jan Fredrik Qvigstad
  • Book: On Central Banking
  • Online publication: 05 July 2016
  • Chapter DOI: https://doi.org/10.1017/CBO9781316584682.002
Available formats
×