Rahamajandus

Rahamajandus is the Estonian term for the field commonly referred to in English as finance or monetary economics. It studies money, banking, financial markets, and monetary policy, and examines how financial institutions and markets affect prices, output, and employment in an economy.

Money functions as a store of value, a medium of exchange, and a unit of account. The creation and management of money by central banks, the role of banks as financial intermediaries, and the operation of payment systems and capital markets lie at the core of rahamajandus.

Key subfields include monetary theory and policy, financial intermediation and banking, financial markets and instruments, financial regulation and supervision, and international finance.

Institutions include central banks (in Estonia, Eesti Pank; monetary policy decisions are taken within the Eurosystem led by the European Central Bank), commercial banks, investment firms, stock and bond markets, and payment infrastructure.

Estonian context: Estonia adopted the euro in 2011, and monetary policy is formulated by the ECB within the Eurosystem. Eesti Pank oversees financial stability, currency issuance, and domestic payment systems.

Current issues in rahamajandus include digital payments and fintech development, cybersecurity, financial inclusion, macroprudential oversight, and the resilience of the financial system to shocks.