AN ANATOMY OF MONETARY EQUILIBRIUM IN THE ECONOMY

Abstract

Monetary equilibrium often indicates stability in an economy. Most economic disturbances, at any stage of development, stem from breaking the equality between money and the value of goods. The focus of this paper is therefore on the analysis of monetary equilibrium within the context of the quantity theory of money and within the context of contemporary dimensions of economic systems that are, or are not exposed to shocks. The effect of interest and return is examined so as to defend the thesis that breaking monetary equilibrium is almost invariably the result of the subjective decisions of economic agents.