Difference between revisions of "Numéraire"
Karl Jones (Talk | contribs) (Created page with "In mathematical economics, the '''numéraire''' or '''numeraire''' is a tradeable economic entity in terms of whose price the relative prices of all other tradeables are e...") |
Karl Jones (Talk | contribs) (→External links) |
||
Line 21: | Line 21: | ||
* [https://en.wikipedia.org/wiki/Num%C3%A9raire Numéraire] @ Wikipedia | * [https://en.wikipedia.org/wiki/Num%C3%A9raire Numéraire] @ Wikipedia | ||
+ | |||
+ | |||
+ | [[Category:Economics]] | ||
+ | [[Category:Mathematics]] |
Revision as of 17:38, 25 April 2016
In mathematical economics, the numéraire or numeraire is a tradeable economic entity in terms of whose price the relative prices of all other tradeables are expressed.
Description
In a monetary economy, acting as the numéraire is one of the functions of money, to serve as a unit of account: to provide a common benchmark relative to which the worths of various goods and services are measured.
Using a numeraire, whether monetary or some consumable good, facilitates value comparisons when only the relative prices are relevant, as in general equilibrium theory.
When economic analysis refers to a particular good as the numéraire, one says that all other prices are normalized by the price of that good.
For example, if a unit of good g has twice the market value of a unit of the numeraire, then the (relative) price of g is 2. Since the value of one unit of the numeraire relative to one unit of itself is 1, the price of the numeraire is always 1.
See also
External links
- Numéraire @ Wikipedia