

Economist George Selgin on Money, Inflation, and the Federal Reserve
13 snips Jan 2, 2025
In this enlightening conversation, George Selgin, an economist and Senior Fellow at the Cato Institute, unravels the labyrinth of money and banking. He traces the evolution of money from barter to modern financial systems, critiquing common misconceptions about money creation. Selgin examines the historical significance of gold and the Federal Reserve's role in inflation management. Listeners learn why understanding money is essential to navigate political promises and economic realities. Dive into a world where money impacts communities and behaviors!
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Defining Money
- Economists define money as a generally accepted medium of exchange.
- Various measures of money exist (M1, M2, etc.) due to its fuzzy definition.
Money vs. Currency vs. Credit
- Currency is physical money (coins and paper) used without bank involvement.
- Credit cards represent borrowing, not actual money owned by the cardholder.
Money and Debt
- Modern money is often tied to debt because bank deposits are backed by investments.
- This system is efficient, allowing for investment and economic growth.