Sunday, January 9, 2011

Money & Central Banks

I don't know how many of you generally listen to National Public Radio's This American Life.  I don't always catch it, but I usually enjoy it when I do.

This weekend they had a really interesting episode on What is Money? It does a good job explaining how money is just a tool and has value only to the extent that we believe in it. The episode began when a number of NPR reporters started to wonder about the money that was "lost" in the recent down market.  It meanders through how Brazil addressed its inflation problem in the 1990s by creating a virtual currency. And it winds up with a discussion on how the Federal Reserve usually creates money and what it did differently during this last crisis (think "lender of last resort").

It will take you an hour to listen to, but it will be worth your time even if you only get some great short anecdotes to use in your classroom.

Let me know what you think.

1 comment:

Flow5 said...

Money is the measure of liquidity (the yardstick by which the liquidity of all other assets is measured).

& MV does not equal PQ