Evolutionary Changes and Relevant Teachings

On the other hand (from the case of “revolutionary” changes) there is often the possibility that a system of money may gradually improve in quality, either through somewhat accidental circumstances (like a very favorable trade balance) or through the learning of good teachings of applicable varieties.

A series of American economists have been notable through their contrib-utions which have enhanced the understanding of how systems of money actually function and particularly of how the dollar (US) and its value have been interacting with the relevant factors of influence. There has always been some “populist” thinking in the USA which can encourage ideas about money that are not well based in any scientific sense. And the teachings of some of the notable economists have sometimes given a more scientific perspective on the areas where the “populist” viewpoints have been influential.

M. Friedman acquired fame through teaching the linkage between the supply of money and, effectively, its value. In retrospect it seems as if elementary, but Friedman was as if a teacher who re-taught to American economists the classical concept of the “law of supply and demand”, this in connection with money.

We can also note at this point that the understanding of the effects of the uncontrolled behavior of all the various “users” of a domestic money is the inclusive category of description into which the notable contributions of a series of American economic scholars can be recognized.

F. Kydland, R. Lucas, E. Phelps, and E. Prescott are notable American economists who have contributed to the better understanding of issues arising in the area of theories of “macro-economics”. Without arguing for a direct constitutional reform of the status quo of the dollar in the USA, they have contributed much enlightenment in relation to the interactions between intell- igent categories of the “users” of currencies (or in particular the dollar) and “the central authorities” (of central bank, treasury, state institutions, executive and legislative government). The evolving recognition of the fact that the “users” of a currency become like players in a game and have optional strategies by means of which they will be able to seek to optimize according to their own particular economic interests leads to the recognition that the tasks of central planners and managers, of a state, are not as simple as if they had only to herd flocks of sheep.

Thus the “users”, like the managers, can be viewed as players in inter- active games. In particular, with this perspective, it is natural to think of the users as having “expectations” in relation to the future value of the domestic currency, compared either with real assets, foreign currencies, or indices of costs. These expectations may or may not be “well-founded” or “rational” but they will inevitably guide or influence the choices made by the “users”.