2irianors dea! money Ideal money Ideal money is a theoretical notion promulgated by John Nash (Nobel Laureate in Economies), to stabilize intemational eurrencies. It is. solution to the Triffin dilemma which is generally about the contlict of economic interests between the short-term domestic and long-term international objectives when a currency used in country is also a world reserve currency in the meantime, Introduction How does the idea of Ideal Money appear "Money can be recognized as technological development cammparable tothe whee! and of similar antiquity. Among the more recent developments in the technology that facilitates transfers of uit Gin the sense of game theory) are systems like those of EZ Pass, by means of which vehicles traversing toll bridges or toll highways can pay their toll fees without stopping forthe attention of human personnel manning the tll boots. In this lecture, I present remarks about the history of monetary systems and about issues of comparative quality ormert, along with «specific proposal about how a system or systems of ‘ideal money'might be established and employed.) NEEL EEN John Forbes Nash Main value standard of ideal money deal money is working in the theory similar to the gold standard, but it is generally based on & Nonpolitical Value Standard. "A possible rnonpolitcal basis for a value standard that could be used for money would be a good industrial consumption price index(ICPI) statistic. This statistic could be calculated from the intemational price of commodities such as copper, silver, tungsten, and so forth that are used in industrial activities"! John Nash said in his lecture. ‘Why gold can not be an ideal money The gold doesnot reach the standard of deal money, despite is merits. The main problem is because the silver and gold do not have a constant value al the me, *To the ndisceming minds ofthe mass of men # pound string of gold a silver five-fane piece, or «paper deta, represents always a definite unt thas not escaped attention, however, that a given amount of money buys much less atone ime than another" in other words, people are used to measuring the value of goods by money but duc to some reasons the value of money itself changes, which causes the valve of silver or gold changes, We can tell the constant valve ofthe meal, and the fixed mind-sss an not easily be changed Related factors mentioned in Nash's lecture Welfare Economics ""A related topic is that of the considerations to be given by society and the national state to ‘social equity’ and the general “economic welfare’. Here the key viewpoint is methodological, as we see it. How should society and the state authorities seek to improve economic welfare generally and what should be done at times of abnormal economic difficulties or‘ depression’? We can't go into it ll, but we feel that actions which are clearly understandable as designed for the purpose of achieving a ‘social welfare’ result are best, And in particular, programs of unemployment compensation seem to be comparatively wel structured so that they can operate in proportion to the need." Generally, the soial welfare ie what we always expect tobe improved, and if there is realy an ideal money, the whole economy would be influenced, including the social welfare. Money, Utility, and Game Theory ‘The concept of utility generally appears inthe field of economics but it can be connected with the game theory in mathematics.In the game theory of economics, “utility” is a very important and essential factor. In the book (on game theory and economic behavior) written by the ‘mathematician John von Neumann and the economist Oskar Morgenstern, a utility function is proved, which can be used to put the individual's preference on the interval scale, and the uty is always preferred to be maximized, (More details can be found in Von Neumann-Morgenstern utility theorem.) Jn John Nash's lecture abou ideal money, he gave the opinion that we can through observing the changing relationship between the money and the utility transfer to see "how the ‘quality’ of a money standard can strongly affect the areas of the economy involving financing with longer-term credits, And also, we can see that money tells a sort of ‘ult’, using the word in another sense, comparable to supplies of water, electric energy or telecommunicatons, And then, i we think about it, money may become as comparable tothe quality of some ‘public uty Tike the supply ofelectic energy or of water") The game theory of economics i a good way to check whether the quality ofa money is ideal or not hitpsipt atpts!amXeypiWaWknFUnkLwHCnL72vedxj@XDDP tmXxWoSucolwik/Ideal_money.html 182an22018 Ideal money "Keynesians" "The thinking of J. M. Keynes was actually multidimensional and consequently there are quite different varieties of persons at the present time who follow, in one way or another, some ofthe thinking of Keynes. A very famous saying of Keynes was “in the long run we will all be dead..."3] Keynesian economies gives the opinion: in the short run, the change in economic output has a strongly relationship with the change in aggregate demand, the output is always affected by the demand, If there isan ideal money which can be stable in a very long period, we do not really need to worry about lots of problems in the Tong run, Asymptotically ideal money Main idea Asymptotically ideal money is the currency close to but stil not ideal money. In John Nash’s lecture, "Ideal Money and Asymptotically [deal Money" focused on” the connection between fluctuation in inflation and exchange rates and the perceived long-term value of money", he mentioned that; "Good money's money that is expected to maintain its Value over time, “Bad money’ is expected to lose value over time, as under conditions of inflation. The policy of inflation targeting, whereby central banks set monetary policy with the objective of stabilizing inflation ata particular rae, leads in the long run to what Nash called ‘asymptotically ideal money’ currency that, while not achieving perfect stability, becomes more stable over time.""$I That means if a currency has shown a trend to be more sta could become an asymptotically ideal money or even the ideal money in the future, Currencies may become (asymptotically) ideal money Euro John Nash mentioned in his lecture that Euro might become an ideal money in the future, because Euro is tused in a large range of places and has a good stability. It is the currency used by the Institutions of the European Union and is the official currency of the eurozone which consists of 18 of the 28 member states of the European Union. In general, Euro has a macroeconomic stability, people in Europe owning large amounts of euros are "served by high stability and low inflation.” Moreover, in March 2014, Euro was commented as "an island of stability” by the head of the European Central Bank.!S) Euro References 1.1 2"Ideal money". Southern Economic Journal, 2002, Yol69(1), pp4-II [Peer Reviewed Journal}. July 1, 2002 2.7 san Ideal Money Attainable?”, Journal of Palitial Econom. 1903. dois10.1086/250969. JSTOR 1820954 5.123 "Lecture by John F. Nash Jr, Ideal Money and Asymptotically Ideal Money" (PDP. 44 "Nobel winner Nash eritques economic theory". April 27, 2005, 5.1 "ECB boss Draghi brands euro an island of stability despite sluggish growth and igh unemployment” External links 1» Fordham eNewsroom on Nash's 2008 lecture = Nash Equilibrium This article is issued from Wikipedia (hutps:/en wikipedia org/wik/Ideal_money oldid~748990189) - version ofthe 11/11/2016. 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