Herbert Stanley Jevons (1875-1955) was the first Professor of Economics and Head of the Department of Economics at the University of Allahabad. He was also the first President of the Indian Economics Association and the first editor of the Indian Journal of Economics (IJE). The IJE was the second Indian economic journal after the Bengal Journal of Economics.
But, more famous than Herbert was his father, William Stanley Jevons (1835-1882), the 19th-century British economist who influenced, among others, Alfred Marshall and Irving Fisher. Jevons Sr. started his career in 1854 as an assayer in a mint in Sydney, Australia. In 1855, sending money to his father, Jevons wrote:
I must say the money has given me very little satisfaction, except that of sending it home. Whether in the bank or in your pocket I find £100 like a very disagreeable weight on the mind, so I shall be very glad when it is off my hands, though I hope safe in yours.
Jevons Sr. is perhaps best known today for enunciating the three functions of money: a unit of account, medium of exchange, and store of value (these three now subsume a fourth function, standard of deferred payment). He put these views in his ‘Money and the Mechanism of Exchange’, published in 1875, the same year when Herbert was born.
The three functions of money continue to be a valuable and practical framework for assessing the relative strengths of currencies, whether by form or by country of origin. In 2013, as a member of the Reserve Bank of India’s first internal group on virtual currency, I too used it to present my ideas on behalf of the Bank’s Department of Regulation. In its first significant position paper on virtual currency in 2013/14, the Federal Reserve also used the same framework.
Eswar Prasad, Tolani Senior Professor of Trade Policy and professor of economics at Cornell University, and Senior Fellow at Brookings, published his The Future of Money - How the Digital Revolution Is Transforming Currencies and Finance in 2021. The Future of Money is a significant addition to Prasad’s earlier outstanding works on currency, ‘The Dollar Trap: How the U.S. Dollar Tightened Its Grip on Global Finance’ and ‘Gaining Currency: The Rise of the Renminbi.’
The Future of Money also assesses cryptocurrencies or crypto assets, depending on how you would like to call them, and central bank digital currencies, based on the same framework of the three functions of money. My review of the book is in the link below.
A shorter and edited version appeared in The India Forum, the online journal magazine on contemporary issues, on 21 March 2022.
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