The Money Illusion: Market Monetarism, the Great Recession, and the Future of Monetary Policy Kindle Edition
Use the Amazon App to scan ISBNs and compare prices.
Download the free Kindle app and start reading Kindle books instantly on your smartphone, tablet, or computer - no Kindle device required. Learn more
Read instantly on your browser with Kindle Cloud Reader.
Using your mobile phone camera - scan the code below and download the Kindle app.
Enter your mobile phone or email address
By pressing "Send link," you agree to Amazon's Conditions of Use.
You consent to receive an automated text message from or on behalf of Amazon about the Kindle App at your mobile number above. Consent is not a condition of any purchase. Message & data rates may apply.
- Highlight, take notes, and search in the book
- In this edition, page numbers are just like the physical edition
- Length: 414 pages
- Word Wise: Enabled
- Enhanced Typesetting: Enabled
- Page Flip: Enabled
- Audible book: Audible bookAvailable
Switch back and forth between reading the Kindle book and listening to the Audible book with Whispersync for Voice. Add the Audible book for a reduced price of $7.49 when you buy the Kindle book.
Forgoing the usual relitigating of the problems of housing markets and banking crises, renowned monetary economist Scott Sumner argues that the Great Recession came down to one thing: nominal GDP, the sum of all nominal spending in the economy, which the Federal Reserve erred in allowing to plummet. The Money Illusion is an end-to-end case for this school of thought, known as market monetarism, written by its leading voice in economics. Based almost entirely on standard macroeconomic concepts, this highly accessible text lays a groundwork for a simple yet fundamentally radical understanding of how monetary policy can work best: providing a stable environment for a market economy to flourish.
Inspire a love of reading with Amazon Book Box for Kids
Discover delightful children's books with Amazon Book Box, a subscription that delivers new books every 1, 2, or 3 months — new Amazon Book Box Prime customers receive 15% off your first box. Learn more.
About the Author
- ASIN : B09H38YLPL
- Publisher : University of Chicago Press (September 28, 2021)
- Publication date : September 28, 2021
- Language : English
- File size : 3827 KB
- Text-to-Speech : Enabled
- Screen Reader : Supported
- Enhanced typesetting : Enabled
- X-Ray : Not Enabled
- Word Wise : Enabled
- Print length : 414 pages
- Page numbers source ISBN : 022677368X
- Lending : Enabled
- Best Sellers Rank: #162,369 in Kindle Store (See Top 100 in Kindle Store)
- Customer Reviews:
About the author
Top reviews from the United States
There was a problem filtering reviews right now. Please try again later.
The author, Scott Sumner, rose to prominence during and on the heels of the "Great Recession" of 2007-09 with his unorthodox explanations of why the Federal Reserve was prolonging, rather than shortening, the recession. As time passed, Sumner's predictions continued to be accurate while more prominent economists were proven wrong. Sumner moved from the fringe to the mainstream in March 2020 when the Federal Reserve acted in massive, unprecedented fashion with asset purchases in line with Sumner's recommendations -- and turned what could well have turned into a global Great Depression into a somewhat "ordinary", and short, recession.
The Money Illusion is the first book accessible to lay people to provide a systematic understanding of Sumner's views.
Parts 1-3 discuss the history of models of macroeconomics like Keynesianism, strict Monetarism, New Keynesian, neo-Fisherian, Rational Expectations and New Classical models. The book goes on to explain Sumner's explanations for the shortcomings of each of these theories, with multiple and meticulous examples of those shortcomings. Later, the book lays out the underpinnings of Market Monetarism, the name ascribed to the school of thought of Sumner and like-thinking economists.
The Money Illusion goes on to explain why Market Monetarism is the best approach to the uber-complex problem of "managing" -- a term Sumner would abhor -- the growth of the national, and world, economy. It further explains why the media and public obsession with interest rates as the measure of economic policy is misguided and counterproductive.
The Money Illusion reads like a well-written mystery, as Sumner wanders through the history and shortcomings of conventional economic thought, leaving this reader anxious to turn the page to learn how the mystery unfolds. While probably not appropriate for most high schoolers, the book, with graphs instead of mathematics, is certainly accessible to anyone with some college with a sincere desire to understand the economy.
It is impossible to run randomized controlled trials on the national and international economies. We may never know objective truth about these complex systems. So while we can't know The Money Illusion portrays objective truth, we can know that Market Monetarism explained the Great Recession in real time, although not many were listening. We can also know that Market Monetarism explained what the Federal Reserve should do in March 2020, in real time, and that the Fed's interventions worked, likely saving the global economy. Because of its accessibility to lay people, The Money Illusion may prove to be the most important book ever written on economic theory.
Read this book.
Into that void stepped an obscure monetary economist from Bentley University, and he changed the course of macroeconomic policy with his insights. He focused on the straightforward application of textbook monetary policy principles to arrive at a conclusion that shocks people: blame for the severity of the Great Recession lies at the feet of the Federal Reserve. Scott has advocated for rules which are now being adopted by central banks around the world (the Federal Reserve recently implemented “average inflation targeting” which is a form of price level targeting which Scott has long believed would have been an improvement on the Fed’s prior policies.
There’s a reason why policymakers are doing what Scott was calling for a decade ago. Scott’s calling card is being right about things *in advance*
He correctly predicted the following:
1. The Fed’s paying interest on excess reserves in 2008 would hurt the economy.
2. “Open ended” quantitative easing (tied to objective health of the labor market rather than any set dollar figure) would help the economy. This was validated in 2012 when the fed adopted this policy and generated an immediate positive market reaction
3. Congress’s failure to avoid “fiscal cliff” would NOT hurt the economy because the fed could fully offset the drag of increased taxes and decreased spending. This was validated when job growth stayed steady in 2013 after we plunged over the “fiscal cliff”
There’s still room to improve macroeconomic policy, though, and you should read this book if you want to know more.