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- Marmefelt, Thomas, 1962-
(författare)
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Hanseatic Monetary Arrangements and the Functional Separation of Money
- 2013
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Ingår i: The 25th EAEPE annual Conference Website [online]. ; , s. -27
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Konferensbidrag (övrigt vetenskapligt/konstnärligt)abstract
- In order to theoretically analyze, from the perspective of new monetary economics andsociallearning,theevolution of monetary arrangementswith functional separation of money,thispaperanalyzes the history of Hanseatic monetary arrangements and the functional separationof money in the Baltic and North Seas region, that is, the evolution of units of account andmedia of exchangealong the East-West trade routes of the Hanseatic League. Focusing on thecognitive aspect of money as social institution, the evolution of units of account and media ofexchange are studied as adaptive responses by human minds. The emphasis will be on theheuristics of long-distance traders in the Baltic and North Seas region, considering theexchange of commodities and of monies.Going beyond the emergence of money as mediumof exchange, this paper studies the emergence of unitsof account and of media of exchange,that is, the emergence of monetary arrangements as co-evolution of units of account, in theMiddle Ages called monies of account, and media of exchange, in which the value of moneyis given by its purchasing power, be it money of account or money as medium of exchange.This paper views institutions as having both a cognitive and a behavioral component. Associal institution, money has a cognitive dimension, which represents the way traders thinkabout money as unit of account and medium of exchange, respectively, in the form ofmonetary heuristics, translating the unit of account to a particular worth, using a social scriptto which market agents attribute a specific worth.When the value of the underlyingcommodity bundle changes from the original worth, market agents observe a script deviationof that bundle, attributing that to changes in the commodity space, and adjust the bundleaccordingly. As social institution, money also has a behavioral dimension, which is expressedin the purchasing power of money; what commodity bundle could be bought for a certainamount of one currency, a medium of account with its associated media of exchange, foranother currency, thus establishing exchange rates. Exchange rates between currencies wereestablished according to relative perceived purchasing power, some kind of classifier system.Along the cognitive dimension, long-distance tradersformed beliefs about the relativepurchasing power of their currencycompared with the foreign one; along the behavioral onethey exchanged money at the rates so specified.The Hanseatictrade was organized along theline Novgorod-Reval-Lübeck-Hamburg-Bruges-London, whereBruges is of particularinterest as meeting place between Italian and Hanseaticmerchants, an interface ofMediterranean and Baltic commerce.In Bruges,Italianmerchant-bankers operated, usingbillsof exchange to meet the requirements of trade by correspondence, while Hanseatic traderelied on the exchange contract adopted to traveling trade. Hanseatic merchants openedtransitory accounts with Flemish money-changers to be used as means of settlement.Amonetary market orderevolved through the exchange of money and of commodities.
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- Marmefelt, Thomas, 1962-
(författare)
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Mind and Monetary Arrangements : A Method to Assess Monetary Heuristics in Historical Time
- 2012
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Konferensbidrag (övrigt vetenskapligt/konstnärligt)abstract
- In order to theoretically analyze, from the perspective of new monetary economics and social learning, the evolution of monetary arrangements with functional separation of money, this paper develops a method to study this phenomenon in the history of monetary arrangements of the North and Baltic Seas region, from the Hanseatic League onwards. The aim is to do historical economics, analyzing history from the perspective of the economic theorist, while the approach is topic-oriented rather than discipline-oriented, involving economics, history, and cognitive science. The focus will be on the cognitive aspect of money as social institution. This implies multiple methods. The evolution of units of account and media of exchange are adaptive responses by human minds. The focus will be on the heuristics of long-distance traders in the Baltic and North Seas region, expressed in the form of units of account and media of exchange they used and their success in the contemporary trading environments. Lessons for monetary separation with an abstract unit of account compared with one based on a commodity bundle will be developed. This involves the identification of the unit of account in which contracts and calculations were made and what media of exchange were used to make the payments. From a cognitive perspective, the medium of account provides a script that translates the unit of account into a particular worth. When the value of the underlying commodity bundle changes from the original worth, market agents observe a script deviation of that bundle, attributing thatto changes in the commodity space, and adjust the bundle accordingly. This method will be developed to be able to study four historical cases: Hanseatic monetary arrangements, seventeenth century banking, the gold standard and the unification of monetary functionsand nineteenth century monetary unions,and interwar monetary fragmentation.
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- Marmefelt, Thomas, docent, 1962-
(författare)
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Artificial Intelligence, Complexity, and the Economy as Emergent Order
- 2019
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Ingår i: 31st Annual EAEPE Conference 2019.
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Konferensbidrag (övrigt vetenskapligt/konstnärligt)abstract
- Artificial intelligence represents technological change that allow machines to calculate by using big data. Human minds construct algorithms, which define such calculation processes, which warrant a corresponding institutional change. The algorithms themselves lack consciousness and reason. The economy is a complex social system, which constitutes an emergent order, involving self-organization. As such it is the outcome of a web of social interaction among many economic agents. Coordination among them is done through the price mechanism. The capital structure of the economy evolves over time becoming increasingly complex. Artificial intelligence and machine learning algorithms are consciously developed by humans for particular circumstances of time and place, i.e. historically specific, stable contexts, for which particular models would be suitable. Algorithms are developed by human minds to address specific contexts. However, no human mind has the knowledge required to understand the economy as a whole, because of its evolving complexity, including change and chance. Institutions guiding the development of artificial intelligence would align the values embodied in such technologies with human values, thus submitting artificial intelligence to social norms. Imitation may not be the best guide to learn moral behaviour. Instead some anchoring in intrinsic values, such as fairness and happiness, would be more effective, using computational social choice theory. Fair allocation is a crucial issue, bringing in interpersonal comparisons and relational considerations, solidarity and robustness to change. Using a utilitarian perspective, computational social choice is fundamentally consequentialist, maximizing a social welfare function, which presumes the existence of single preference ordering, hard to achieve without coercion, which is required due to complexities, that is more fine-tuning by the state. In contrast, a contractarian approach would focus exclusively on fairness, treating all cases alike, but all cases are not necessarily alike, so justice itself, as principle of social choice, is an emergent order. Both rules guiding artificial intelligence and their enforcement then become two spontaneous orders, involving a decentralized approach where many contractual arrangements establish a fair allocation, in which the economy is an emergent order. Social cooperation as near-ultimate criterion in the pursuit of happiness is compared with social coexistence as ultimate criterion, concerning the emergence of virtues of artificial intelligence.
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- Marmefelt, Thomas, docent, 1962-
(författare)
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COVID-19 and Economic Policy Toward the New Normal : A Monetary-Fiscal Nexus after the Crisis?
- 2020
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- Current developments during the COVID-19 pandemic involve strongly complementary monetary and fiscal policy, but both as responses to COVID-19 and not the outcome of an emergent monetary-fiscal nexus. Therefore, the ECB maintains its independence by using unconventional monetary policy measures to reach price stability, according to its mandate.This document was provided by the Policy Department for Economic, Scientific and Quality of Life Policies at the request of the Committee on Economic and Monetary Affairs (ECON) ahead of the Monetary Dialogue with the ECB President on 19 November 2020.
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- Marmefelt, Thomas, 1962-
(författare)
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Developing New Monetary Economics Using the Monetary Theory of Schumpeter, Mises, and Wicksell
- 2011
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Konferensbidrag (övrigt vetenskapligt/konstnärligt)abstract
- According to Schumpeter, money is a clearing device, a social institution rather than a commodity, and money supply constitutes a critical figure that determines the price level.Schumpeter argues that the value of money is independent of its metal content, but also finds a legally defined ticket inappropriate.He pointsout that the purchasing power of money cannot bea matter of exchange value, nor of use value, butthe purchasing power of a unit of income.According to Mises, Schumpeter tries to build a catallactic ticket theory, which requires a comparison of available tickets and opportunity space, using the sum of money incomes and the product of prices and consumption goods. He finds that the commodities relate only to circulating money, while money relates to production goods as well as consumption goods, more commonly tothe turnover of production goods to production goodsthan to the exchange of production goods for consumption goods. For Mises, the value of money must be based upon utility, but the objective exchange value of money reflects subjective individual valuations. Money is an emergent order and the intangible money emerging today represents an institutional form of money with an accounting system of exchange, moving towards Wicksell’s pure credit economy, in itself making monetary separation suitable. According to Wicksell, a pure credit economy requires that the value of money is made independent of its commodity function. Credit is a remedy to scarcity of money, while bills of exchange increase virtual velocity. He argues that the unit of value should be independent of material thingsand thatthe inconvertible paper coinis used as credit medium, implying an abstract medium of account. The New Monetary Economics involves a functional separation of monetary functions making units and media of account distinct from media of exchange. In the Black-Fama-Hall (BFH) system, developed by Yeager and Greenfield, the unit of account is physically defined by the state as a non-convertible nearly comprehensive commodity bundle, which constitutes the critical figure in such a system, while the media of exchange are privately issued.This is contrasted to separation of the functions of media of account from media of exchange, where the media of account are abstract, such as Meulen’s banknote pound.These two approachesto the media of account are analyzed from the perspective of Schumpeter, Wicksell, and Mises.
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