Neil Wallace on Money

He says,

“Money is memory” is a better idea. It leads you to think about various kinds of payment instruments in terms of the kind of informational structure that supports them. The money that is the best current counterpart to the “money is memory” idea is currency. You don’t need much of an informational network for currency; in fact, you probably don’t need any, except for worrying about counterfeiting.

Read the whole thing. Pointer from Tyler Cowen. At this Cato event, George Gilder and I talked about money as a low-entropy channel, and during the Q&A I used that metaphor to suggest that Bitcoin is not functioning as money.

Wallace also offers this ominous quote.

while one can imagine arrangements in which control of the price level is maintained in the presence of large and unsustainable government deficits, it rarely happens.

This entry was posted in Monetary Economics, Tyler Cowen is my Favorite Blogger. Bookmark the permalink.