Commodity Money

  • François R. Velde
  • Warren E. Weber
Part of the The New Palgrave Economics Collection book series (NPHE)


A commodity is an object that is intrinsically useful as an input to production or consumption. A medium of exchange is an object that is generally accepted as final payment during or after an exchange transaction, even though the agent accepting it (the seller) does not necessarily consume the object or any service flow from it. Money is the collection of objects that are used as media of exchange. Commodity money is a medium of exchange that may become (or be transformed into) a commodity, useful in production or consumption. This is in contrast to fiat money, which is intrinsically useless.


Exchange Rate Monetary Policy Central Bank Relative Price Monetary Authority 
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Copyright information

© Palgrave Macmillan, a division of Macmillan Publishers Limited 2010

Authors and Affiliations

  • François R. Velde
  • Warren E. Weber

There are no affiliations available

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