Money functioning as a"Measure of Economic Uncertainty"?

External question — Economics Stack Exchange Author: Rishav Dhariwal Original post: https://economics.stackexchange.com/questions/61035 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. I recently encountered a question about the functions of money that left me a bit confused. The question is as follows: Money has following functions- A. Medium of Exchange B. Unit of account C. Store of value D. Measure of Economic Uncertainty E. Measure of Happiness my initial thought process was that option D (Measure of Economic Uncertainty) might also be applicable in a broader macroeconomic context. My reasoning is that during periods of economic uncertainty, central banks implement monetary policies like Quantitative Easing (QE), and the demand for money (liquidity preference) shifts drastically. I understand the classical triad of money's functions, but my question is: Are there any established macroeconomic theories, models, or academic sources that explicitly define or use money itself as a "measure of economic uncertainty"? If my logic is completely flawed and conflating the management of money with the function of money, I would appreciate sources clarifying that distinction as well.

External answer — Economics Stack Exchange Author: 1muflon1 Original post: https://economics.stackexchange.com/a/61036 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. No A, B and C is the correct answer. See for example Blanchard et al Macroeconomics. Central banks are not by themselves obliged to pursue policies like quantitative easing during periods of uncertainty per se. It’s not like these policies are economically or physically necessary. They are policy choices. What central banks are obliged to do and what they are not obliged to do depends on their mandate that is handed down by lawmakers. This is like arguing that function of face mask is to measure spread of disease just because government made a law that requires people to wear mask if there is some highly contagious disease. That is simply not the function of the object, since masks are not created for that purpose. Are there any established macroeconomic theories, models, or academic sources that explicitly define or use money itself as a "measure of economic uncertainty"? No, to my best knowledge there is no textbook or other source that would list this as part of the function of money. If my logic is completely flawed and conflating the management of money with the function of money, I would appreciate sources clarifying that distinction as well. Indeed this is precisely the flaw of your argument. Central banks, in our current monetary system (i.e. not in all other possible monetary systems with money), are entities that are legally obliged to manage money supply in a way that is dictated by their mandates. In US with its dual mandate that means that Fed has to pursue loose monetary policy during demand driven recessions. This has nothing to do with function of money. Not sure what sort of clarification you are looking for a textbook will simply explain functions of money which are also definition of money (i.e. money is defined as something that satisfies A, B and C). Why we use this definition and not some other arbitrary definition is metaphysical question for philosophers not economists.