Money, Credit, and Cryptocurrencies

What is money? It’s a time-honored question in economics, and the stock answers usually involve such phrases as “a medium of exchange” or “a reliable store of value.” But the definition seems increasingly up for grabs in the twenty-first century, as central banks undertake experiments to keep economies stable and cryptocurrency innovators launch new products like stablecoins that promise to upend the fiat money system. Perry Mehrling, a professor of international political economy at Boston University’s Pardee School of Global Studies and the author of several books and journal articles, uses what he calls the “money view” to make sense of the contemporary monetary landscape. On this episode of Risk Talking, Mehrling joins Allison Schrager to discuss how understanding the basic features and hierarchy of money can help us understand the cryptocurrency crash of 2022.