What is the core of finance?

The core of finance is the exchange of value across time and space. All transactions involving the distribution of value or income between different times and different spaces are financial transactions. Finance is to study why the value exchange across time and space appears, how it happens, how it develops and so on.

For example, "money" is like this. It first appeared to store today's value, and then used it to buy other things tomorrow, the day after tomorrow or at any time in the future. However, money is also a cross-regional exchange of value. Today, you are selling things in Zhang Cun, and you walk to Licun with the money. You can use the money to buy what you want. Therefore, money solves the problem of storage and displacement of value across time and space, and the emergence of money is a revolutionary innovation for the development of trade and commercialization.

For example, the Shanxi "draft bank" developed in the Ming and Qing Dynasties mainly aims at the exchange of value in different places, so that the trade that should have been completed by transporting goods and silver across regions can be completed by sending a "piece of paper" issued by the Shanxi draft bank! Its advantage is that it greatly reduces the transaction cost of goods trade in different places, allows material production companies and commodity enterprises to focus on their own special goods, and leaves the challenge of payment in different places to the ticket number operators, reflecting their respective professional division of labor! After the transaction cost is so reduced, it is difficult for the cross-regional trade market not to develop rapidly!