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On The Historical Validity Of Nominal Money As A Measure Of Organizational Performance: Some Evidence And Logical Analysis


  • stanley c. w. salvary

    (Canisius College)


In the literature, nominal money has been decried as a reliable measure. However, before condemning money as a defective measure, it is necessary to examine in a historical context the nature and the role of money in a money economic system, and the changes over time in the types of money (commodity money versus paper money). Using historical evidence and logical analysis, this paper attempts to establish the validity of nominal money as a valid device for the measurement of organizational perfor mance. This paper reveals that: (1) the deficiencies of commodity money (and the historical arguments associated with it) are attributed to paper (fiat) money; (2) in a historical setting, there are very restrictive conditions under which paper money would be a defective measuring device; and (3) under general economic conditions, paper money is a reliable measure.

Suggested Citation

  • stanley c. w. salvary, 2005. "On The Historical Validity Of Nominal Money As A Measure Of Organizational Performance: Some Evidence And Logical Analysis," Macroeconomics 0502018, EconWPA.
  • Handle: RePEc:wpa:wuwpma:0502018
    Note: Type of Document - wps; pages: 25

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    References listed on IDEAS

    1. Hicks, J. R., 1987. "Capital and Time: A Neo-Austrian Theory," OUP Catalogue, Oxford University Press, number 9780198772866.
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    Cited by:

    1. Stanley Salvary, 2005. "Accounting And Financial Reporting In A Changing Environment: Historical And Theoretical Perspectives," Economic History 0510003, EconWPA.

    More about this item


    organizing economic activities; commodity money; representative paper money; transaction cost reduction; extrinsic and intrinsic values; uncertain nominal value; non specified purchasing power; individual preferenc; stored entitlements.;

    JEL classification:

    • E - Macroeconomics and Monetary Economics

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