Patri Friedman on Market Monetarism

Here is Patri Friedman on his blog “Patri’s Peripatetic Peregrinations”:

“I sent a friend an intro to market monetarism (a modern, blogosphere-inspired adjustment to the traditional monetarism my grandfather helped create). He was surprised I believed that printing money could be good, rather than agreeing with the Austrians.”

I am happy to see that Patri has read my paper on Market Monetarism.

There is of course nothing wrong in thinking that “printing money could be good” (under certain circumstances). In fact this is completely in line with what Patri’s grandfather Milton Friedman argued in terms of the Great Depression and the Japanese crisis.

Patri in his post also discusses how a “helicopter drop” could happen in a world of digital cash. Interestingly enough this discussion is similar to a recent internal Market Monetarist debate between Nick Rowe, Bill Woolsey and Scott Sumner about whether money is a medium of exchange or a medium of account. See for example here, here and here. Kurt Schuler also has contributed to the discussion. Finally Miles Kimball similarly has a very interesting post on the case for electronic money.

Patri’s discussion of digital cash to some extent also relates to my own discussion of monetary reform in Africa and the development of mobile based money (See for example here, herehere and here).

Anyway, I am happy to Patri seems to be showing some sympathy for Market Monetarism.

HT Lasse Birk Olesen

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6 Comments

  1. Alex Salter

     /  November 12, 2012

    Sigh…someday, it will be common knowledge that a sizable fraction of Austrian (and Austrian-influenced) economists are students of monetary disequilibrium, and thus have no problem with issuing additional money balances per se.

    Reply
    • Alex, I think that that is a pretty good illustration of modern Austrianism’s problems. You are absolutely right – “tudents of monetary disequilibrium, and thus have no problem with issuing additional money balances per se.”

      However, many do not see the Austrian school to be based monetary disequilibrium theory. In that sense the Austrian school has a PR problem, which probably reflects the unfortunate dominance of Rothbardian Austrians in the world of internet Econ.

      Reply
  2. Lars
    Maybe you missed it, but my post “Two kinds of money” does an expanded take on Brazil along the lines K Schuler did for Peru:

    http://thefaintofheart.wordpress.com/2012/10/31/two-kinds-of-money/

    Reply
  3. Lars, your comments on the MoA/MoE controversy are conspicuous in their absence… I’m getting tired of fighting with Scott over this.

    Glad to hear Patri Friedman is on board! (I’d be even happier if David was too…)

    Reply
    • Saturos, it is soon vacation time for the Christensen family, but I am sure that I over the coming two weeks will have time to write a commetn on the MoA/MoE controversy, but let me just say that I read Yeager and Clower.

      Regarding David Friedman – I am not sure that he is on board, but David reads my blog and comment on it from time to time, but mostly on none-monetary issues.

      Reply
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