Monetary analysis: The question of the nature and the role of money

The basic representation of economic activity usually consists of a set of markets, where agents supply and demand goods. One mechanism, generally price variations, makes total supply equal to total demand on every market. Such a situation is defined as equilibrium. Due to the still unresolved difficulties to prove convergence towards equilibrium, this paper aims to provide an alternative basic representation. Given that a set of markets in equilibrium is a representation stemming from real analysis, where goods are the starting point of every theorization, the alternative representation is built upon money. The latter as a starting point thus gives rise to monetary analysis. The conception of money in monetary analysis, as a unit that allows economic magnitudes to be expressed, and as the means to settle the transactions associated with those magnitudes, leads to a basic representation in terms of an evolving network of payments. The paper then clarifies the theoretical status of goods once given s uch a basic representation.