Economics and the Social Meaning of Money

Abstract

This chapter explains why nonfungibility remains “a hard sell” for traditional economists but then demonstrates how and why recognizing monetary differentiations advances our understanding of economic activity. Drawing from the US Financial Diaries project, the chapter documents the frequency of earmarking in a sample of low- and moderate-income households in five states across America. Families, the study discovered, often earmark money earned by a particular family member or generated from a particular job. Earmarking income for particular purposes generally leads to spending patterns that deviate from economic expectations based on assumptions of household-level optimization with full fungibility. The chapter argues that while behavioral economists and game theorists have developed their own explanations of such “anomalous” monetary choices, it is time to create theories along with policy interventions that recognize the power of money's social meanings.

Is It Legitimate for Society to Intervene in the Way Citizens Live Their Lives When the Cost of Health Care Has to Be Borne by the General Public?—General Considerations and Special Implications During the Covid-19 Pandemic

“…In this model of health financing, all citizens (or employers) pay a percentage of their income (or pension) into the health system or into the statutory health insurance funds in the form of contributions. In return, the costs of treating illnesses are covered by the system ( 2 ). There are also deductibles in some areas, such as the prescription fee for medication or dental treatment.…”