Scott Sumner Explains the Monetary Approach to Macroeconomics in Nine Lessons

The index is here. Highly recommended.

For my perspective on this topic (including where I disagree with Sumner), see my “million mutinies” essay series:

part one

part two

part three

In the last essay in my series, I wrote

For mainstream economists, the financial crisis has produced a new intuitive model of the economy which has yet to be articulated in any formal theory.

Scott Sumner, on his blog The Money Illusion, articulates what I believe would have been the consensus five years ago, which is that fiscal and monetary policy (he emphasizes the latter)—as opposed to bank capital management—are the tools of macroeconomic stabilization. Today, his views are classed as “heterodox.”

I write so much that I sometimes forget earlier pieces that meant a lot to me, such as this one. I was looking for some more “color” to add to this post, and I stumbled on the series.

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