Supplementary resources for high school students
Definitions and Basics
Scrooge McDuck & Money. In this animated short from the Walt Disney Company, Uncle Scrooge discusses the history or money and the importance of money in the overall economy. At Economics Media Library.
What is Money? Why Does It Have Value? In this EconEdLink lesson, students will learn about the history of money and its 5 characteristics.
Functions of Money, at Khan Academy.
Money Supply, from the Concise Encyclopedia of Economics
The U.S. money supply comprises currency—dollar bills and coins issued by the Federal Reserve System and the Treasury—and various kinds of deposits held by the public at commercial banks and other depository institutions such as savings and loans and credit unions….
Price Level, at Investopedia
A price level is the average of current prices across the entire spectrum of goods and services produced in the economy. In a more general sense, price level refers to any static picture of the price of a given good, service, or tradable security….
The Story of Money, at the Federal Reserve Bank of Atlanta.
Guided online edition of museum exhibit.
In the News and Examples
The Economics of Bitcoin, by Robert P. Murphy at Econlib.
Milton Friedman on Money, EconTalk podcast episode
Russ Roberts talks with Milton Friedman about his research and views on inflation, the Federal Reserve, Alan Greenspan and Ben Bernanke, and what the future holds….
Owen on Parenting, Money, and the First National Bank of Dad, EconTalk episode.
Gold Standard, from the Concise Encyclopedia of Economics
The gold standard was a commitment by participating countries to fix the prices of their domestic currencies in terms of a specified amount of gold. National money and other forms of money (bank deposits and notes) were freely converted into gold at the fixed price….
A Little History: Primary Sources and References
Of Money, by David Hume
MONEY is not, properly speaking, one of the subjects of commerce; but only the instrument which men have agreed upon to facilitate the exchange of one commodity for another. It is none of the wheels of trade: It is the oil which renders the motion of the wheels more smooth and easy….
A lesson to accompany “Benjamin Franklin and the Birth of a Paper Money Economy, from the Federal Reserve Bank of Philadelphia.
Barter, Chapter I of Money and the Mechanism of Exchange, by William Stanley Jevons
The first difficulty in barter is to find two persons whose disposable possessions mutually suit each other’s wants. There may be many people wanting, and many possessing those things wanted; but to allow of an act of barter, there must be a double coincidence, which will rarely happen. A hunter having returned from a successful chase has plenty of game, and may want arms and ammunition to renew the chase. But those who have arms may happen to be well supplied with game, so that no direct exchange is possible. In civilized society the owner of a house may find it unsuitable, and may have his eye upon another house exactly fitted to his needs. But even if the owner of this second house wishes to part with it at all, it is exceedingly unlikely that he will exactly reciprocate the feelings of the first owner, and wish to barter houses. Sellers and purchasers can only be made to fit by the use of some commodity, some marchandise banale, as the French call it, which all are willing to receive for a time, so that what is obtained by sale in one case, may be used in purchase in another. This common commodity is called a medium, of exchange, because it forms a third or intermediate term in all acts of commerce….
Modeling Money, by Robert P. Murphy at Econlib.
Where does money come from? Two schools of thought, by Alexander Salter at Learn Liberty.
The first school of thought, held by most economists and derived from Carl Menger’s classic article “The Origins of Money”, is that money is an emergent outcome of a series of exchanges. In any community where goods are exchanged, we would expect some individuals to specialize in producing goods that are relatively more saleable than others, i.e., those that are easier to exchange for what they finally want to consume…The other school, sometimes called the chartalist school, holds that the state (or rather, political power) is the essential feature that gives rise to money.
Where does money come from? Two schools of thought (part ii), by Alexander Salter at Learn Liberty.
The spontaneous order theorists argue money emerges from a process of exchange. The chartalists argue money arises due to the coercive imposition of debt obligations (political power). Which school is right?
Money and Inflation lesson, from the Foundation for Teaching Economics.
The Paradox of Money, by Pedro Schwartz at Econlib.
Purchasing Power of Money as Related to the Equation of Exchange, by Irving Fisher, Chapter 2 from The Purchasing Power of Money
The Function of Money, Chapter I of The Theory of Money and Credit, by Ludwig von Mises
Where the free exchange of goods and services is unknown, money is not wanted. In a state of society in which the division of labor was a purely domestic matter and production and consumption were consummated within the single household it would be just as useless as it would be for an isolated man. But even in an economic order based on division of labor, money would still be unnecessary if the means of production were socialized, the control of production and the distribution of the finished product were in the hands of a central body, and individuals were not allowed to exchange the consumption goods allotted to them for the consumption goods allotted to others….
Vera Smith: The Contrarian View, by Leonidas Zelmanovitz at Econlib.
With this book, Vera Smith seems to be saying, no, Mr. Keynes, the policies you are suggesting are not new, they are not necessary to solve the problems they are purported to solve; most likely, they are part of the cause of the problem. Furthermore, there is an alternative, and that alternative is free banking.
That money does not need to be monopolistically produced or to have its supply regulated by the state can be attested by the fact that money monopolistically produced in one jurisdiction may be used voluntarily by the economic agents in other jurisdictions, as has been the case for millennia. Since the historical evidence demonstrates that the government’s monopoly on money production is not a necessary condition to have a medium of exchange available to the economic agents to facilitate their indirect transactions, that should be discarded as the reason for such a monopoly.
Of the Value of Money, as dependent on Demand and Supply, in Principles of Political Economy with some of their Applications to Social Philosophy, by John Stuart Mill.
The History of Bimetallism in the United States, by J. Laurence Laughlin
The conflicting opinions of the day in regard to the adoption of bimetallism by the United States, and the disregard of the facts within our own experience, make it desirable that these facts should be investigated historically, and the results presented in a simple form for general use. Monetary science, moreover, will gain by any honest attempt to collect accurate data which may serve in the process of verification of economic principles, enabling us either to confirm the truth of previous conclusions, or to demonstrate their divergence from actual facts….