The Correct Money Supply Measure for This Crisis
March 17, 2010 at 10:38 AM EDT
Mark Thoma points us to Gary Gorton’s testimony for the Financial Crisis Inquiry Commission where, among other things, Gorton notes that an accurate measure of the money supply should include repurchase agreements because (1) they too are bank liabilities used as money and (2) they have grown increasingly important: [T]he bank liabilities that we will focus [...]