Much has changed in the institutional organization of money markets since Fall 2012 when INET filmed my course “Economics of Money and Banking”, but what strikes me most is how well the fundamental analytical structure has held up. The two ideas that I identify as central to the “money view”—the importance of the daily settlement constraint in the payments system,
Read moreThe following was inspired by my attendance at a recent conference, Money as a Democratic Medium, where I gave a short talk. The “Money View”, as regular readers of this blog will know, is my attempt to systematize a way of thinking that has a long history among practitioners, especially central bankers, but that has always remained a minority view
Read moreBrine, Kevin R. and Mary Poovey. Finance in America, an unfinished story. University of Chicago Press, 2017. The authors of this book are respectively a non-academic Wall Street practitioner and a non-economist academic, but the text is nonetheless of considerable interest to economists and in particular to historians of economics since it represents an outsider reading and attempted synthesis of
Read moreDecember 15 I attended INET’s day-long workshop on Secular Stagnation, and I meant to write about it at the time. But life intervened, then holidays, then the “bomb cyclone”, until this morning when Twitter drew my attention to the multiple sessions on the topic that are running this weekend at the annual ASSA meeting. Better late than never. On this
Read moreA 2017-end post with this title might be thought to focus on bitcoin, and I will indeed have something to say about that, but in my view the bitcoin bubble is mostly a symptom of deeper trends that need to be uncovered first. Today money is global, so we can start pulling the string anywhere and eventually get the full
Read moreProposals for monetary reform, whether mild or radical, are always and everywhere informed by some underlying theory of money. A week ago I spent two days talking with a group of technologists and lawyers-perhaps I should say digital coders and legal coders-and pressed them on this point. Chatham House rules prevent me from associating views with actual people, but the
Read moreWalter Lippman (1889-1974) is usually remembered, if at all, as a journalist and political commentator, and certainly not as an economist. But that is exactly how we should understand him, so argues Craufurd Goodwin, in his last book Walter Lippman, Public Economist. The reason we don’t see him as an economist is that our understanding of what it means to
Read moreThe following is in blog form the substance of a talk I gave Sept 7 at a Mercatus conference, “Monetary Policy Rules for a Post-Crisis World.“ “Rules versus discretion” is a hardy perennial of monetary policy debate, dating from earliest debates between Bullionists and anti-Bullionists, to the 19th century Currency School versus Banking School, up to the 20th century monetarists
Read moreYou can title your conference whatever you want, but the actual content will depend on the speaker list. The convenors of the Jackson Hole Economic Symposium apparently hoped to generate discussion about “Designing Resilient Monetary Policy Frameworks for the Future“. Having read all the papers, I can report that only one of them really engages the conference title. Everyone else
Read moreFinancialization is not new, nor is discontent with it. “Capitalism is essentially a financial system, and the peculiar behavioral attributes of a capitalist economy center around the impact of finance upon system behavior.” Minsky (1967) Fifty years ago, Minsky zeroed in on instability as the central flaw of the financial system of his time, and located the source of that
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