I've been reviewing some macroeconomic theory regarding the classical functions of money (Medium of Exchange, Unit of Account, Store of Value) and had a conceptual question about how we define money's broader theoretical role.
My thought process is this: During times of severe economic uncertainty, we see major shifts in monetary policy (like Quantitative Easing) and extreme changes in liquidity preference. Because aggregate money demand fluctuates so heavily based on market confidence and risk aversion, could money technically be viewed as a "measure of economic uncertainty"? I am looking to understand if this is an accepted theoretical perspective. Specifically:
- Are there any established academic sources, macroeconomic models, or economic texts that argue "measuring uncertainty" is an actual function of money?
- If my logic is completely off-base, could someone provide sources or an explanation clarifying the strict theoretical boundary between what money is (its core functions) versus how money behaves or is used as an indicator during uncertain times? Any reading recommendations or clarifications would be greatly appreciated!
Is "measuring economic uncertainty" ever classified theoretically as a core function of money? Looking for academic perspectives?
byu/Additional_Guide5439 inAskEconomics
Posted by Additional_Guide5439