June 27, 2016

Macro Musings 12: Will Luther on the Bitcoin, Vodka, and the Emergence of Money

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.

What is money and where does it come from? Will Luther, assistant professor of economics at Kenyon College, joins the show and explains the two competing theories on the origins of money. The first theory is that governments are needed to provide credibility for money as a medium of exchange. The second theory, the spontaneous order theory, argues market actors will arrive at an acceptable medium of exchange on their own. David and Will discuss historic examples of both public and private money, including the Somali shilling and the brief use of vodka as a form of currency in Russia in the 1990s. Will also explains how Bitcoin and other forms of cryptocurrency work and how cryptocurrency may affect future macroeconomic policy.