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.
In particular, the percentage of multidimensional poor that is deemed non-poor according to monetary standards increased from 25.
29) Under the Articles of Confederation, the states did not share a national monetary standard.
Just a few years ago, 11 sovereign countries of Western Europe implemented their plan to shift monetary policy decisionmaking from the autonomous national central banks to a newly created supranational central bank and phased out the 11 national currencies in favor of a single monetary standard to be used by all.
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".
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.
The leading alternative to the fiscal hypothesis, the view that government's purpose in establishing fiat money is to remedy a market failure to converge to a more efficient monetary standard, offers no explanation for the historical timing of the steps toward fiat money.
Should we have a monetary standard based on a definite quantity of a selected commodity such as gold, silver, or any other suitable product to serve as numeraire, as Leon Walras, the great economist of the nineteenth century advised; or
The nation sought to improve its banking system by establishing a means for providing an elastic money in the context of a monetary standard based on full convertibility to gold.