Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/257387 
Year of Publication: 
2022
Citation: 
[Journal:] Economies [ISSN:] 2227-7099 [Volume:] 10 [Issue:] 1 [Article No.:] 24 [Publisher:] MDPI [Place:] Basel [Year:] 2022 [Pages:] 1-16
Publisher: 
MDPI, Basel
Abstract: 
Modern exchange theories model a large market, but do not explain single exchanges. This paper considers the phenomenon of single exchange and formulates the general exchange problem in the form of a system of two equations, subjective and objective. Subjective equilibrium is given by the Walras-Jevons marginal utility equation. Objective equilibrium equations by Walras and Jevons are averaged over all transactions in the market and can only give a rough general picture without explaining the specific price of an individual exchange. An exchange micro-condition must be found that, when averaged, will give the Walras market equilibrium macro-condition. The study of the internal structure of exchange leads to the need to consider power. The concept of generalized power is introduced. It is generalized power that serves as the primary comparable and measurable objective basis of exchange. The power theory of exchange provides the objective price-equation. It is demonstrated that money is a measure of generalized power in exchange and a certification of generalized power in subsequent exchanges. This methodology is based on an interdisciplinary analysis of an abstract exchange model in the form of a system of equations. The proposed theory is able to uniformly explain any exchange, including a single one, which is impossible with the existing theories of exchange.
Subjects: 
exchange
exchange theory
money
money theory
power
JEL: 
A10
A13
A14
D00
D41
D46
D51
E40
G00
Z13
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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