• The Journal of Economics, Marketing and Management
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• v.3 no.1
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• pp.23-32
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• 2015

Present monetary system is based on fallacies. The purpose of this article is to highlight the pitfalls in economic thinking. The article shows that this way of thinking leads to the creation of inflation which is the root of all evil. The analysis proceeds in different approach to the contemporary theory of money. An inflation- free monetary system is introduced. Monetary system is the set of mechanisms that controls money. In this broad sense, monetary system can be divided into three different systems. Each of them has different goal; National monetary system which aims to raise sufficient funds in order to reach an optimal level of output growth that maintains full employment and satisfies the economic requirements of the community. National redistribution system which aims to redistribute funds in order to sustain individuals at or above a specified material standard of living, and enable government to provide public services. International monetary system which aims to preserve rights of parties in foreign exchange transactions.

• The Journal of Asian Finance, Economics and Business
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• v.5 no.2
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• pp.5-14
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• 2018

This study is motivated based on concern from some renowned scholars and central bankers whom have raised the issue of the sustainability of the International Monetary System (IMS). Using the panel data set of four major international currencies, USD, JPY, EUR and GBP from 1973 to 2013 with Pooled Mean Group (PMG) estimator, to re-examine whether Triffin dilemma still exists through investigating the relationship between the reserve share, current account balance and real effective exchange rate. The evidence from the result indicates that Triffin dilemma exists only in the long run, and shows that in the long-run, current account balance is proportionate to the increased real effective exchange rate while varies inversely with the reserve shares. However, the estimation for the short-run is not significant to prove the existence of Triffin dilemma. In addition, we investigated the non-dollar panel sample and found that the international monetary system still suffers from Triffin dilemma even without the dollar. To overcome Triffin dilemma, immediate step such as having currency swap mechanism is recommended. In medium term, a multi-polar Monetary System is suggested, and in the longer time, a supranational currency will be used to replace all the currencies in the world.

• East Asian Economic Review
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• v.16 no.1
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• pp.3-23
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• 2012

The recent global financial crisis has highlighted the importance of international monetary and financial system reform. The current system is deemed to be no longer adequate to meet the needs of a complex, integrated world economy. With regards to the reform of the international monetary system, there have been various proposals both in demand and supply sides. These include proposals to build a stronger global financial safety net, to diversify the supply of international reserve currency and so on. These proposals face trade-offs between desirability and political feasibility. Given this situation, a practical transition would be to strengthen policy coordination among the major economies and to reform the International Monetary Fund. The success on both fronts depends heavily on global economic governance reform and the role of the G20. Increased status and representation of Asian countries in the G20 give both privileges and responsibilities to Asians. To meet these responsibilities, Asians should put forth greater efforts to develop their intellectual leadership in global economic issues through creating new forum and institutions.

• Journal of Korean Institute of Industrial Engineers
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• v.1 no.2
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• pp.65-72
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• 1975

A System of evaluation is developed which determines a uniform and individualized monetary redress. It can be applied not only to permanent disability but to temporary disability cases and considers all factors affecting monetary redress in determining process. As objects of compensation this model considers five factors, the degree of injury, the change of earning capacity, medical fee, job suspension and the degree of contributory negligence. For each object is defined a subfunction measuring its magnitude. Then by assigning reasonable weighted values to these five subfunctions according to their relative importance, we get main function which determines appropriate monetary redress.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.2
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• pp.791-800
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• 2021

Along with the trend of financial globalization, Vietnam has undergone a process of increasing financial integration. The great capital inflow poses a problem for the monetary policy's ability to follow a planned target during the changes in the global financial markets. This paper aims to examine the impact of financial integration on monetary policy independence in Vietnam and investigate the role of foreign exchange reserves on this relationship. The research borrows from Mundell-Fleming's Trilemma theory. The results show that increasing financial integration reduces the independence of monetary policy in the short term, and foreign exchange reserves have not shown an apparent role in Vietnam. In addition, increasing exchange rate stability has a negative impact on the independence of monetary policy, but it has an impact on growing market confidence and partly supporting the management process of monetary policy in the short term. Therefore, in the long run, Vietnam needs to allow exchange rate flexibility more, but there should not be sudden changes; the size of foreign exchange reserves should be strengthened to facilitate the implementation of an independent monetary policy with an obvious impact in the context of an increasing scale of international capital flows in the future.

• International Journal of Computer Science & Network Security
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• v.21 no.6
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• pp.156-160
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• 2021

Every day brings a new challenge to the humanities. Life nowadays needs accuracy, privacy, integrity, authenticity, and security to run life systems especially the monetary system. Things now differ from previous centuries. Multiple varieties in digital banking have opened the new and most advanced innovations for human beings. The monetary system is going to developed day by day to facilitate the public. Electronic money has amazed the world and gave a challenge to central banking. For this purpose, there will be a need for strict security, information, and confidence. Blockchain technology has opened new gateways. Bitcoin has become the most famous digital currency, which has created a thunderstorm in digital marketing. Blockchain, as a new Financial Technology, has satisfied all the security issues and satisfied doing business in secure ways that encourage investors to invest and keep the world business wheel. Assessment of the sustainability of implementing Bitcoin in financial institutions will be discussed. Every new system has its pros and cons in which a clear vision of what we are about to use can be sought. Through this research paper, a demonstration of the monetary system evolution, the new ways of doing business, some evidence in a form of academic cases will be demonstrated through comparison a table, a suggested method to transfer to the new system in safe mode will be proposed, and a conclusion will be concluded.

• KDI Journal of Economic Policy
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• v.12 no.3
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• pp.71-94
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• 1990

This paper reviews the rationale of monetary and banking intervention by an outside authority, either the government or the central bank, and seeks to delineate clearly the optimal limits to the monetary and banking deregulation currently underway in Korea as well as on a global scale. Furthermore, this paper seeks to establish an objective and balanced view on the role of the central bank, especially in light of the current discussion on the restructuring of Korea's central bank, which has been severely contaminated by interest-group politics. The discussion begins with the recognition that the modern free banking school and the new monetary economics are becoming formidable challenges to the traditional role of the government or the central bank in the monetary and banking sector. The paper reviews six arguments that have traditionally been presented to support intervention: (1) the possibility of an over-issue of bank notes under free banking instead of central banking; (2) externalities in and the public good nature of the use of money; (3) economies of scale and natural monopoly in producing money; (4) the need for macro stabilization policy due to the instability of the real sector; (5) the external effects of bank failure due to the inherent instability of the existing banking system; and (6) protection for small banknote users and depositors. Based on an analysis of the above arguments, the paper speculates on the optimal role of the government or central bank in the monetary and banking system and the optimal degree of monetary and banking deregulation. By contrast to the arguments for free banking or laissez-faire monetary systems, which become fashionable in recent years, monopoly and intervention by the government or central bank in the outside money system can be both necessary and optimal. In this case, of course, an over-issue of fiat money may be possible due to political considerations, but this issue is beyond the scope of this paper. On the other hand, the issue of inside monies based on outside money could indeed be provided for optimally under market competition by private institutions. A competitive system in issuing inside monies would help realize, to the maxim urn extent possible, external economies generated by using a single outside money. According to this reasoning, free banking activities will prevail in the inside money system, while a government monopoly will prevail in the outside money system. This speculation, then, also implies that the monetary and banking deregulation currently underway should and most likely will be limited to the inside money system, which could be liberalized to the fullest degree. It is also implied that it will be impractical to deregulate the outside money system and to allow market competition to provide outside money, in accordance with the arguments of the free banking school and the new monetary economics. Furthermore, the role of the government or central bank in this new environment will not be significantly different from their current roles. As far as the supply of fiat money continues to be monopolized by the government, the control of the supply of base money and such related responsibilities as monetary policy (argument(4)) and the lender of the last resort (argument (5)) will naturally be assigned to the outside money supplier. However, a mechanism for controlling an over-issue of fiat money by a monopolistic supplier will definitely be called for (argument(1)). A monetary policy based on a certain policy rule could be one possibility. More importantly, the deregulation of the inside money system would further increase the systemic risk inherent in the current fractional banking system, while enhancing the efficiency of the system (argument (5)). In this context, the role of the lender of the last resort would again become an instrument of paramount importance in alleviating liquidity crises in the early stages, thereby disallowing the possibility of a widespread bank run. Similarly, prudential banking supervision would also help maintain the safety and soundness of the fully deregulated banking system. These functions would also help protect depositors from losses due to bank failures (argument (6)). Finally, these speculations suggest that government or central bank authorities have probably been too conservative on the issue of the deregulation of the financial system, beyond the caution necessary to preserve system safety. Rather, only the fullest deregulation of the inside money system seems to guarantee the maximum enjoyment of external economies in the single outside money system.

• 사회경제평론
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• v.29 no.1
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• pp.119-154
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• 2016

Kalecki thought that monetary and financial factors play very important roles in the processes of investment decision and expenditure. He also acknowledged that interest rate is monetary phenomenon and investment finance is provided by banks prior to savings as Keynes did, and suggested that the more is the debt, the greater is the risk of debtor and lender. However, in developing investment theory he dismissed those monetary and financial factors or substituted into actual profit or savings, because he aimed to construct the investment theory to be able to explain the 'automatic mechanism of the fluctuation of capitalist economy'. Thus it is argued that Kalecki did not consider the monetary and financial factors in his investment theory. This paper aims to modify Kalecki's investment theory so that it incorporates the monetary and financial factors, such as the willingness of banking system to lend, interest rates, the ratio of leverage which had been dismissed by him. The Kaleckian investment theory that incorporates the monetary and financial factors in Kalecki's theory of investment allows us to explain not only an automatic and regular business cycle, but also irregular excessive investment and high leverage, consequent risk increase and financial crisis occurred in the economy with developed financial system.

• KDI Journal of Economic Policy
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• v.27 no.2
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• pp.1-43
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• 2005

This paper examines works of F. Hayek and M. Friedman on monetary and financial policies. This paper highlights their differences, and asks what yielded them. It also shows there exists a gap between young Hayek and old Hayek, which cannot be explained in terms of his view on monetary theories. It further shows that Friedman's argument for '100% reserve bank' was not based on his monetary theories. Differences between Hayek and Friedman despite their common political belief, Hayek's transition, gaps between theories and policy views found in Hayek and Friedman-this paper argues that these facts can be best explained by Kuhn's paradigm theory. This paper concludes that truthfulness of a thesis on the public sector's role in the monetary system is subject to relativism.

• Journal of Korea Technology Innovation Society
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• v.1 no.1
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• pp.96-105
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• 1998

Electronic cash affects central bank in many areas, in particular regarding the issuance of money, supervision of cashless payments, supervision of the banking system and monetary policy. The effects of electronic cash on central bank policies, the security and integrity of the payment system, and naturally also on single sector such as company engaged in the transport of money and valuables, depend mainly on the extent to which the new payment methods can replace cash. The possible development of electronic cash merits special attention from central banks for at least three reasons. First, central banks are concerned that the introduction of the new payment instrument should have no adverse effect on public confidence in the payment system and payment media. Second, although the substitution of electronic cash for other forms of money should not theoretically hamper central bank's ability to control the money supply, it might, however, have practial implications, at least in the long run, which need to be carefully examined. Third, because electronic cash may be used for payments of very small value, they have the potential, more than any other cashless instrument, to take over the role of notes and coins in the economy and, therefore, have implications for central bank's activities and revenues.