My latest Macro Musings podcast is with Josh Hendrickson, assistant professor of economics at the University of Mississippi. Josh and I sit down for a wonky and fascinating discussion of the role of money in monetary economics.
The standard New Keynesian view is that money does not matter for monetary policy. Josh pushes back against this view by making the case that money does still matter, both empirically and theoretically. Empirically, he points to the run on the shadow banking system and studies using the Divisia monetary measures that show money still matters. On the theoretical side, he notes that the latest innovations with monetary search models put money's transaction role front and central in the business cycle. He sees this approach as a much more promising way to understand money than the standard New Keynesian view.
You can listen to the podcast via iTunes or Sound Cloud, or through the embedded player. And remember to subscribe since more guest are coming!
Josh Hendrickson's Webpage
Redundancy or Mismeasurement? A Reappraisal of Money (non-gated version)--Josh Hendrickson
An Evaluation of Milton Friedman's Instability Hypothesis--Josh Hendrickson
Money Still Matters--David Beckworth and Josh Hendrickon
The Supply of Transaction Assets, Nominal Income, and Monetary Policy Transmission--David Beckworth and Josh Hendrickson