The Relative Theory of Money – English Translation of the Leibnitz Module

This is the translation of the Leibnitz Module of the RTM, which follows the Bresson Module.

Leibnitz Module

(a) Thoughts on the Relativity of Prices (N)

Let’s assume that for a short time compared to life expectancy (a few years), the prices of some known values are relatively stable in the M/N frame of reference. Given this hypothesis, simulate:

• create the spreadsheet of a Libre Currency in both Quantitative and Relative (UD) frames while the population is composed of N individuals
including I1, I2 and I3 ; N is a variable represented in a column, during 80 years, one line per month (80×12 lines) as well as a newcomer I4 who enters when N varies,
• on a short period of time, express the relative price in the frame M/N during a few years of an economic value V ; translate the quantitative price in UD,
• express during the same period the price of V compared to the accounts of every individual,
• simulate cases where “N increases strongly” and “N decreases strongly” in a few years, create the charts of the prices of V (which remains quite stable in the quantitative frame), in the 3 units as well as relative to the 4 individuals,
• Compare and interpret the results.

(b) Reflections on the formula of the UD when N is unstable

• In the same spreadsheet, simulate two strong local variations of N (10 times growth/reduction) during a small period of time (2 years), N remains stable otherwise,
• add I4 who is a newcomer during the variation of N,
• express for the 4 individuals the variations of the price of V (which we will assume is still stable in the quantitative frame) in the 3 units (quantitative, UD, M/N) and relative to the accounts of each individual, during a period of 20 years around the variations of N (before and after),
• try to find a possible range for the UD’s formula between minimal and maximal values by studying the case of the 4 individuals,
• Compare and interpret.

(c) Studying different UD formulas

• In the same spreadsheet, simulate two strong local variations of N (x 10) on a short period (2 years), N remains stable otherwise,
• Simulate for the 4 individuals different formulas for the UD that can be studied in a 20 year interval before and after the variation of N,
• simulate the same formulas when N is stable in another spreadsheet,
• compare each formula graphically by comparing it to M/N when N is stable,
• calculate for each of these formulas the standard deviation with the stable case,
• Compare and interpret the results.