Article
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Preserved in Portico This version is not peer-reviewed
Power Theory of Exchange and Money
Version 1
: Received: 23 November 2021 / Approved: 24 November 2021 / Online: 24 November 2021 (09:25:46 CET)
Version 2 : Received: 26 November 2021 / Approved: 26 November 2021 / Online: 26 November 2021 (12:47:48 CET)
Version 2 : Received: 26 November 2021 / Approved: 26 November 2021 / Online: 26 November 2021 (12:47:48 CET)
A peer-reviewed article of this Preprint also exists.
Stefanov, Y. Power Theory of Exchange and Money. Economies 2022, 10, 24, doi:10.3390/economies10010024. Stefanov, Y. Power Theory of Exchange and Money. Economies 2022, 10, 24, doi:10.3390/economies10010024.
Abstract
Modern exchange theories model a large market, but do not explain single exchange. The paper considers the phenomenon of single exchange and formulates the general exchange problem in the form of a system of two equations, subjective and objective. Subjective equilibrium is given by the Walras-Jevons marginal utility equation. Objective equilibrium equations by Walras and Jevons are averaged over all transactions in the market and can only give a rough general picture without explaining the specific price of an individual exchange. An exchange micro-condition must be found that, when averaged, will give the Walras market equilibrium macro-condition. The study of the internal structure of exchange leads to the need to consider power. The concept of generalized power is introduced. It is generalized power that serves as the primary comparable and measurable objective basis of exchange. The power theory of exchange provides the objective price-equation. It is demonstrated that money is a measure of generalized power in exchange and a certification of generalized power in subsequent exchanges. The proposed theory is able to uniformly explain any exchange, including a single one, which is impossible with the existing theories of exchange.
Keywords
exchange; exchange theory; money; money theory; power
Subject
Business, Economics and Management, Economics
Copyright: This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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