Perry Mehrling is Professor of Economics at Barnard College, Columbia University, where he has been teaching since 1987. He likes to say that he learned economics at the London School of Economics, where he earned an MSc in Econometrics and Mathematical Economics in 1983. After that, he got his PhD in Economics from Harvard University, but he spent most of his time there in the stacks of Widener Library, not in the classroom. Important for his intellectual formation, he did his undergraduate training (also at Harvard) not in economics, but rather in a general social science major called Social Studies, which was organized around the great texts of social science: Smith, Weber, Marx, Freud, Durkheim.
It was at the end of his junior undergraduate year that he conceived the idea to specialize in economics, and within economics to focus on monetary economics. Treatises on money, so it seemed to him, were the way that economists did social theory, and hence offered the best entry point to the field as a whole. Keynes’ General Theory of Employment Interest and Money was the first such treatise he tackled. At the LSE, his tutor Douglas Gale drew attention to the so-called Hahn Problem, that modern general equilibrium theory has no place in it for money. Starting from this point of challenge, and continuing for the next thirty years, Mehrling began searching for more satisfactory foundations for monetary theory.
His first book, The Money Interest and the Public Interest, American Monetary Thought 1920-1970 (Harvard 1997), identified an alternative tradition of monetary thought that emerged from American institutionalism. His second book, Fischer Black and the Revolutionary Idea of Finance (Wiley 2005), tells the story of the rise of modern finance, both as a set of ideas and as a set of institutions, that transformed the monetary landscape starting in about 1970. His third book, The New Lombard Street, How the Fed became the Dealer of Last Resort (Princeton 2011), retraces the chronology of the first two books but now as a story about the origin and subsequent development of the U.S. central bank.
Parallel with this visible historical research, Mehrling has also been engaged in a sustained line of analytical research, largely invisible to the outside world because it took place mainly in the classroom. In fall 1996, Mehrling began teaching “Economics of Money and Banking”, and for the next fifteen years he used that course as his primary vehicle for working out a modern theory of money. In fall 2012, the Institute for New Economic Thinking filmed his lectures for the course, and in fall 2013 the film was published as an online course on the Coursera platform. The “money view” elaborated in these lectures is Mehrling’s attempt to make sense of the modern monetary landscape, in effect his own treatise on money.
Prior to publication of The New Lombard Street and Economics of Money and Banking, Mehrling was known to the world primarily as an historian of economic thought. After those publications, he has become known more as a monetary economist, and his views on shadow banking are now sought by market practitioners, financial regulators, and central bankers all over the world.