Meaning of Money
Although there is widespread agreement among economists about the importance of money, they have never agreed on the specific meaning of money, i.e., how to define and how to measure money. A proper definition of money is required for two reasons : (a) A close correspondence must exist between the theoretical definition of money and the empirical (or measurable) definition of money, (b) The empirical definition of money must be closely and predictably related to the ultimate national goals.
Definition of Money
Money has been defined differently by different economists.
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According to Walker, “Money is that money does”. Saligman defines money as “one thing that possesses general acceptability”.
According to D.H. Robertson, “anything which is widely accepted in payment for goods or in discharge of other kinds of business obligations is called money”.
According to G.D.H. Cole, “the essence of money is that it can be passed from hand to hand in one act of circulation to another”.
Crowther defines money as “anything that is generally acceptable as a means of exchange and at the same time acts as a measure and store of value”.
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It is clear from the above definitions that the definition of money is essentially functional and also must satisfy the general acceptability criterion, A complete definition should include all the important functions of money and also its basic characteristic, i.e.,. General acceptability. Thus Crowther’s definition may be considered better as it covers both these qualities.