The New Monetary Economics

About this episode

The episode explores the evolving landscape of monetary economics, focusing on the implications of cryptocurrencies and stablecoins on traditional financial systems.

In this exploration of the "new monetary economics," Alex and Tyler revisit the ideas of thinkers like Fischer Black, Eugene Fama, and Robert Hall, whose bold views about the Fed and the money supply once seemed detached from reality but now increasingly describe the financial world we inhabit. They explore why traditional measures like the money supply are becoming obsolete, how crypto and stablecoins are reshaping monetary systems, and why AI might emerge as a major consumer—and creator—of cryptocurrencies. They also discuss the paradox of pegged currencies, the lessons of algorithmic stablecoin failures like Terra, and the surprising connections between fiscal and monetary policy in a world of increasingly liquid assets. Finally, they reflect on how the unconventional ideas of new monetary economics, once dismissed as fringe, are now critical for understanding our modern financial landscape. Recorded March 14, 2024 Transcript, video, and links: https://www.mercatus.org/marginal-revolution-podcast/new-monetary-economics Chapters 00:00 - Outlining the ideas of new monetary economics 09:03 - The difficulty of defining the money supply 17:36 - What determines the inflation rate…

People in this episode

Hosts: Alex, Tyler

Topics covered

• new monetary economics
• money supply
• cryptocurrencies
• stablecoins
• inflation
• fiscal policy
• financial systems

Keywords

• monetary economics
• money supply
• inflation rate
• crypto
• stablecoins
• algorithmic stablecoins
• fiscal policy
• financial landscape

Mentioned in this episode

Organizations: Fed, Terra

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