monetary system

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Related to monetary standard: gold standard, Monetary policy

monetary system

the assets which make up a country's MONEY SUPPLY and the institutions involved in deposit-taking, money transmission and the provision of credit facilities, together constitute the monetary side of the ECONOMY.

The money supply consists of a number of assets (banknotes, coins etc.), denominated in terms of MONETARY UNITS (pounds and pence in the case of the UK). The institutions involved in handling money include various BANKS, FINANCE HOUSES, BUILDING SOCIETIES etc. The monetary system of a country is controlled by its CENTRAL BANK which uses a number of techniques to regulate the supply of money and interest rates (see MONETARY POLICY).

The monetary system also has an external dimension in that participation by countries in INTERNATIONAL TRADE and FOREIGN INVESTMENT requires the establishment of interactive mechanisms such as EXCHANGE RATES and INTERNATIONAL RESERVES. See INTERNATIONAL MONETARY FUND.

monetary system

the policies and instruments employed by a country to regulate its MONEY SUPPLY. The physical form of the money supply (bank notes, coins, etc.), the denomination of the values of monetary units (pounds and pence, etc.) and the total size of the money supply are basic policy issues.

The instruments that can be used to control the money supply include OPEN MARKET OPERATIONS, SPECIAL DEPOSITS, DIRECTIVES and INTEREST RATES.

The monetary system also has an external dimension insofar as countries engage in international trade and investment, which involve interactive mechanisms such as the EXCHANGE RATE, CONVERTIBILITY and INTERNATIONAL RESERVES. See also MONETARY POLICY, INTERNATIONAL MONETARY SYSTEM.

References in periodicals archive ?
"The network property of a monetary standard," White (2012: 414-15) observes, "supports the case for not simply legalizing a parallel standard, but reestablishing a gold definition for the U.S.
In particular, the percentage of multidimensional poor that is deemed non-poor according to monetary standards increased from 25.8 percent to 39.0 percent (18).
Also, in their historical analyses they not only point out the generally recognized shortcomings of the both versions of the gold-exchange standard (the 1930s and the Bretton Woods version), but they also tend to argue that countries were better off without an international monetary standard. They do neglect to a significant extent to analyze the economic and political consequences of the breakdown and of the absence of an international monetary order.
Constitutional forms of government usually specified a stable currency, but as James Buchanan observed, such provisions have been inadequate: This framework role for government also was considered to include the establishment of a monetary standard, and in such fashion as to insure predictability in the value of the designated monetary unit.
In other words, the main culprit is the artificial monetary standard of Great Britain based on a paper-pound and monetized bank credit, or as it is rolled, "managed currency".
'Memorandum by the Secretary, Attendant to Report on Variations in the Value of the Monetary Standard', Report of the British Association for the Advancement of Science, pp.
A valid case for low inflation must have to do with the inefficiencies caused by allowing the monetary standard to vary and by the instability that results when the inflation trend is changed.
The gold standard would still be a highly controversial subject in the national debate, and there were attempts to bring back or add silver to the monetary standard. The goal of bimetallism, where the monetary standard is a ratio of gold to silver as fixed by government mandate, was a return to increasing the money supply due to the abundance of silver while hiding under the banner of hard currency by using a commodity.
Just the opposite: they have delegitimized and destroyed both the gold monetary standard and gold medical standard.
The proposed amendment calling for 1,500 signatures or a $1,500 fee would move the initiative process too far away from citizen activism toward a monetary standard.
The ubiquitous impulse to undermine the value of, and confidence in, the currency of one's enemies is testament to the indispensable role of a stable and reliable monetary standard in modern economies.
Such a vote of confidence would be the clearest sign that the ECB is succeeding in creating a secure monetary standard.