It occurs to me that, despite the unprecedented flood of writings of all sorts — books, blog-posts, newspaper op-eds, and academic journal articles — addressing just about every monetary policy development during and since the 2008 financial crisis, relatively few attempts have been made to step back…
Although there's no such thing as a straightforward measure of the quantity of money in an economy, monetary policy is nonetheless about managing that quantity. How ought it to be managed? The (misleadingly) simple-sounding answer is: so that it neither falls short of nor exceeds the quantity…
Few people would, I think, take exception to the claim that, in a well-functioning monetary system, the quantity of money supplied should seldom differ, and should never differ very much, from the quantity demanded. What's controversial isn't that claim itself, but the suggestion that it supplies a…
Changes in the general level of prices are capable, as we've seen, of eliminating shortages or surpluses of money, by adding to or subtracting from the purchasing power of existing money holdings. But because such changes place an extra burden on the price system, increasing the likelihood…
In previous installments of this primer I've tried to convince you, first, that monetary policy is ultimately about keeping the available quantity of money from differing substantially, if only temporarily, from the quantity demanded and, second, that doing this boils down in practice to having a money…