The relationship between the money supply and inflation was probably most famously propounded in A Monetary History of the United States by Milton Friedman and Anna Schwartz. Since that book, new methods of measuring the money supply have been created. I talked to Patrick Horan of the Mercatus Center about Divisia money-supply measures, which he used in a new paper about inflation. We talk about the economic history of U.S. inflation going back to the 1960s and how economists have viewed the importance of the money supply in explaining it.

Then I talk about the report from the Economic Innovation Group about the labor market that I wrote about last month. The common narrative of today’s labor market being uniquely unstable is wrong, and both economic data and long-running surveys of workers’ sentiments confirm that conclusion.

I also talk about the economics of interest groups in the context of the Democratic primary race between Jamaal Bowman and George Latimer. AIPAC spent $15 million on a race where the candidate it supported, Latimer, was probably always going to win anyway. I explain why, in the absence of profit-and-loss signals, interest groups sometimes do things that don’t seem to make financial sense.

We also have a repeat Paper of the Episode, but it’s so good I let Pat do it again: “Uncertainty, Evolution, and Economic Theory” by Armen Alchian.

Listen and subscribe to Econception on your preferred podcast platform by clicking here.