Monetary School

Money plays the most important role in the behaviour of markets.

Monetary economics analyzes money in terms of the functions of a medium of exchange, a store of value, and a unit of account. It sees money as closely tied to macroeconomic activity. Although closely related to classical economics, monetary economics places a broader significance on the role of money.

Monetarists frequently advocate the use of fiat money as a public good, which the state maintains a responsibility for managing. Austrians agree with the importance of money, yet believe that, as a medium of indirect exchange, the market should control its quantity and value (or market price).