Definitions

From L. Randall Wray, "Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems" (2nd ed., Palgrave Macmillan, 2015), pp. xiv-xv

• Money: general, representative unit of account

  • "Money tokens": money-denominated IOUs

• Currency: coins, notes and reserves issued by a government

• Bank reserves: private bank deposits at the central bank

  • Used for clearing among banks, meeting cash withdrawals, making payments for customers to government

• Net financial assets: total financial assets less total financial liabilities

• IOU: financial debt, liability or obligation to pay, denominated in money of account

  • Asset of the holder (creditor); liability of the issuer (debtor)