#19 – Logan Chipkin: Understanding Economics
Arjun Khemani Podcast
The Economic Properties of Money
The lower the inflation rate, the better it can serve as a medium of exchange and then in turn as a store of value. The relative hardness of the commodity also affects its stock to flow ratio. These properties of money are economic; they're not physical per se. For example, when I say gold is very durable, that's true on earth. It's true from the perspective of non-human degradation of gold. But if we had the technology and the knowledge of making paperclips extremely durable at let's say zero cost, then suddenly gold and paperclips would be on an even playing field with respect to durability.
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