The notion that currency or money was always and is today merely a "record keeping device" is highly misleading. Cash transactions are quid-pro-quo exchanges even now, and as such must be distinguished from mere record-keeping, with debts yet to be, or never, settled. 1/n https://twitter.com/OliverFDavey/status/1319248316169936896

A settlement medium, like gold coin once upon a time, or Federal Reserve balances today, is categorically distinct from a credit medium. To conflate them is therefore a serious category mistake. Sometimes clever metaphors are too clever by a half! 2/

Of course for certain purposes the error may be harmless. But for others--like trying to come up with a correct understanding of historical exchange systems and the role trust played in them--it's a recipe for misunderstanding.3/

If Wimpy offers a gold coin for a hamburger today, he's not proposing a credit transaction as he would by offering to make compensation on Tuesday! The joke of course is that no one wants to give Wimpy the hamburger in the 2nd case. So should they also refuse it in the first? 4/

These considerations are why I've never been a fan of Kocherlakota's oft-cited and clever but, IMHO, fundamentally misleading paper: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjP3eeimsjsAhU-lXIEHTmRDIgQFjAAegQIBBAC&url=https%3A%2F%2Fwww.minneapolisfed.org%2Fresearch%2Fsr%2Fsr218.pdf&usg=AOvVaw3Uhb1_Z4oQUa6Im30yhTdt (Fin)