June 6, 2016

Macro Musings 09: Josh Hendrickson on Measuring Money in the Economy

Hosted by David Beckworth of the Mercatus Center, Macro Musings is a new podcast which pulls back the curtain on the important macroeconomic issues of the past, present, and future.

Josh Hendrickson, assistant professor of economics at the University of Mississippi, joins the show to discuss whether money matters anymore. It may come as a surprise to the layman, but most monetary economists don’t pay close attention to the money supply. Instead, they prefer to look at economic slack, inflation, and interest rates when considering monetary policy. Hendrickson pushes back against this view by making the case that money does still matter both theoretically and empirically. He shows how new modeling approaches and better money measurements point to an important role for money. The run on the shadow banking system during the crisis and the subsequent collapse in its money supply are used to illustrate these points. Finally, Josh and host David Beckworth discuss the importance of Twitter and blogging in building a professional brand.