6 thoughts on “Lecture 8. Money, money supply, money creation, monetary demand and monetary policy.”
I appreciate your elaboration on aspects that many people tend to misinterprete.I like the fact that I can now tell the difference between; demand for money (demand for one to hold their own assets in liquid form), demand for loans (demand for one to borrow from someone else) and cash demand for loans (wanting to borrow somebody else’s assets).
But then,why do you insist that you can persuade anybody to print money as long as they have a machine yet it’s usually like a government policy or directive in line with the central bank to print money?
It is a game I play with my undergraduates. I give them access to a printing press in theory and ask them to print money to do things and it is always possible to get people to print as long as they see it in the context of the greater good.
Thanks for your comments Ntono
Thank you Mr. JB for this lecture. I loved the way you broke down the definition of money and then later went into detail about the various forms of money( older versions Vs newer versions ). I appreciate that you related how money creation to the monetary policy through the monetary demand, it was very enlightening. I can ably discern the differences between each especially in a really world setting.
My question is with the rise of fintech and digital wallets, should the central banks consider alternative measures or methods of money supply other than the traditional M1, M2, and M3?
Professor Hearn, thank you for your lecture on Modern Monetary Theory. You argue that excessive money creation inevitably leads to inflation and loss of confidence in the currency. However, some MMT proponents suggest that inflation can always be managed with taxation and government controls. In your view, what is the strongest evidence against this claim, and do you see any circumstances where MMT ideas could work in practice without causing instability?
jbhearn 
I appreciate your elaboration on aspects that many people tend to misinterprete.I like the fact that I can now tell the difference between; demand for money (demand for one to hold their own assets in liquid form), demand for loans (demand for one to borrow from someone else) and cash demand for loans (wanting to borrow somebody else’s assets).
But then,why do you insist that you can persuade anybody to print money as long as they have a machine yet it’s usually like a government policy or directive in line with the central bank to print money?
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It is a game I play with my undergraduates. I give them access to a printing press in theory and ask them to print money to do things and it is always possible to get people to print as long as they see it in the context of the greater good.
Thanks for your comments Ntono
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Thank you Mr. JB for this lecture. I loved the way you broke down the definition of money and then later went into detail about the various forms of money( older versions Vs newer versions ). I appreciate that you related how money creation to the monetary policy through the monetary demand, it was very enlightening. I can ably discern the differences between each especially in a really world setting.
My question is with the rise of fintech and digital wallets, should the central banks consider alternative measures or methods of money supply other than the traditional M1, M2, and M3?
Thank you for your time. Gos bless you.
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Many thanks for your comment. Crypto threatens CB’s so they are fighting back with CBDC’s.
You may find this fun. https://jbhearn.wordpress.com/2021/03/01/miscellaneous-lecture-7-is-crypto-the-new-gold-standard/
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Professor Hearn, thank you for your lecture on Modern Monetary Theory. You argue that excessive money creation inevitably leads to inflation and loss of confidence in the currency. However, some MMT proponents suggest that inflation can always be managed with taxation and government controls. In your view, what is the strongest evidence against this claim, and do you see any circumstances where MMT ideas could work in practice without causing instability?
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MMT make the mistake of thinking taxation destroys money and spending creates it. This may help.
https://jbhearn.wordpress.com/2019/07/08/mmt-mmters-mistake-1-cause-of-inflation-and-hyperinflation/
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