What is monetary economics and its scope?

Answer 1

The monetary economy is that part of a society's economic system where products and services are traded in exchange for money. A monetary economy stands in contrast to an economy based on bartering (called barter economy) or to an economy where goods are not traded, i.e. where the goods are produced and consumed by the same households (closed household economy). These two types of economies are said to be non-monetary economies. I define monetary economics to be the study of the causes and economic consequences of the monetization of exchange -- that is, of the use of media of exchange. These definitions lead me to specify the distinctive objective of monetary economics to be to understand: (1) the monetization of exchange and its relation to the technologies of production and of exchange, (2) the form that money takes and, especially, the viability of Fiat money, (3) the determination and significance of the real value of units of money, and (4) the relation between the nominal quantity of money and aggregate economic activity.