Money

Definitions of money:

Money has been defined differently by different economists, as there is no unanimityover its definition. Some definitions are too extensive while others are too narrow. For example, Walker’s definition is too wide. In Walker’s words” Money is what moneydoes”. According to this definition, we can include all those things in money, whichperform the functions of money. Thus money does not comprise metallic coins andcurrency notes only. It also includes cheques, hundies, bills of exchange, etc., becausethey also perform the functions of money. On the other hand, Robertson’s definition of money is rather narrow. According to him, Money is a “commodity, which is used todenote anything which is widely accepted in a payment for goods or in discharge of other business obligations”. According to this definition, metallic money alone deserves to becalled money in the strict sense of the term because it alone is generally acceptable by thepeople, left to them. This definition unnecessarily narrows down the field of money.Some economists define money in legal terms saying that ‘anything which the statedeclares as money is money”. Thus, money possesses legal sanction to discharge debtsand perform other functions of money. But legal sanction alone is not a significant factor in making money generally acceptable. The bank deposits or credit money are not legaltender money but these are generally acceptable in payment and actually constitute amajor part of the circulating medium.None of above definitions is satisfactory since they are either two wide or too narrow. Asuitable definition of money should emphasize not only the important functions of money, but also its basic characteristic, namely, general acceptability. From this point of view, Crowther; s definition appears to be ideal definition. He defines money as‘anything that is generally acceptable as a means of exchange and that at the same time

acts as a measure and as a store of value”. This...