![]() ![]() Barnett and the Center for Financial Stability (CFS) in New York, the superior measure of the money supply for the U.S. Those components with the most moneyness should be weighted more heavily than assets with less moneyness. ![]() Accordingly, the components should not receive the same weights when added together to yield a money supply measure. The components (assets) that make up the money supply contain varying degrees of “moneyness” - defined as the ease of, and the opportunity costs associated with, exchanging assets into money that can be readily used in transactions for goods and services. Conventional wisdom holds that the best way to measure the money supply is to define the components that make up a particular measure of money (from M0 to broad M4) and then simply add up the components to obtain a total.īut, this convention contains a fatal economic flaw. Federal Reserve, measure the money supply. I begin with the nonsensical way that most central banks, including the U.S. Let’s take a tour d’horizon and examine three ideas that bear rethinking in 2013. ![]() The year 2012 has come and gone, and so have many things that were once accepted as conventional wisdom. ![]() Hanke: Famous Economist in Money and Finance Professor, John Hopkins University Hanke: Rethinking Conventional Wisdom IMI Steve H. ![]()
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