Perry G. Mehrling (born August 14, 1959) is professor of

economics Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interac ...

at Pardee School of Global Studies at Boston University. He was professor of

Barnard College Barnard College is a Private college, private Women's colleges in the United States, women's Liberal arts colleges in the United States, liberal arts college affiliated with Columbia University in New York City. It was founded in 1889 by a grou ...

New York City New York, often called New York City (NYC), is the most populous city in the United States, located at the southern tip of New York State on one of the world's largest natural harbors. The city comprises five boroughs, each coextensive w ...

for 30 years. He specializes in the study of financial theory within the history of economics.

Life

Perry Gandhi Mehrling received an B.A. (magna cum laude), a Ph.D. from

Harvard University Harvard University is a Private university, private Ivy League research university in Cambridge, Massachusetts, United States. Founded in 1636 and named for its first benefactor, the History of the Puritans in North America, Puritan clergyma ...

and an M.Sc. from the

London School of Economics The London School of Economics and Political Science (LSE), established in 1895, is a public research university in London, England, and a member institution of the University of London. The school specialises in the social sciences. Founded ...

. Mehrling was valedictorian of the class of 1977 at

Boston Latin School The Boston Latin School is a Magnet school, magnet Latin schools, Latin Grammar schools, grammar State school, state school in Boston, Massachusetts. It has been in continuous operation since it was established on April 23, 1635. It is the old ...

. He was a professor in the Economics Department at

/Columbia University for 30 years until 2017 and is the Director of Educational Programs at the

Institute for New Economic Thinking The Institute for New Economic Thinking (INET) is a New York City–based nonprofit think tank. It was founded in October 2009 as a result of the Great Recession, and runs a variety of affiliated programs at major universities such as the Cambr ...

, a global not-for-profit organization dedicated to changing the way economics is currently taught. He teaches the hugely popular "Economics of Money and Banking"

MOOC A massive open online course (MOOC ) or an open online course is an online course aimed at unlimited participation and open access via the World Wide Web, Web. In addition to traditional course materials, such as filmed lectures, readings, and p ...

on the

Coursera Coursera Inc. () is an American global massive open online course provider. It was founded in 2012 by Stanford University computer science professors Andrew Ng and Daphne Koller. Coursera works with universities and other organizations to offe ...

website.

Publications

Mehrling is the author of ''Money and Empire: Charles P. Kindleberger and the Dollar System'' (2022), ''The Money Interest and the Public Interest: American Monetary Thought, 1920-1970'', published in 1998, as well as a 2005 biography of

Fischer Black Fischer Sheffey Black (January 11, 1938 – August 30, 1995) was an American economist, best known as one of the authors of the Black–Scholes equation. Working variously at the University of Chicago, the Massachusetts Institute of Technology, ...

, ''Fischer Black and the Revolutionary Idea of Finance''. In the wake of the 2008-2009 Financial Crisis, there was significant interest in his book * ''The New Lombard Street. How the Fed Became a Dealer of Last Resort''. Princeton University Press, Princeton, NJ 2011, Linen: , e-book: He wrote his thesis under Meghnad Desai and Douglas Gale at the

. It was published by the

University of Chicago The University of Chicago (UChicago, Chicago, or UChi) is a Private university, private research university in Chicago, Illinois, United States. Its main campus is in the Hyde Park, Chicago, Hyde Park neighborhood on Chicago's South Side, Chic ...

Journal of Political Economy The ''Journal of Political Economy'' is a monthly peer-reviewed academic journal published by the University of Chicago Press. Established by James Laurence Laughlin in 1892, it covers both theoretical and empirical economics. In the past, the ...

. It synthesized differential game-theoretic models of

capitalism Capitalism is an economic system based on the private ownership of the means of production and their use for the purpose of obtaining profit. This socioeconomic system has developed historically through several stages and is defined by ...

, due to Kelvin Lancaster and

Richard M. Goodwin Richard M. Goodwin (February 24, 1913 – August 13, 1996) was an American mathematician and economist. Background Goodwin was born in New Castle, Indiana. He received his BA and PhD at Harvard and taught there from 1942 until 1950. He fl ...

. Gale's

general equilibrium In economics, general equilibrium theory attempts to explain the behavior of supply, demand, and prices in a whole economy with several or many interacting markets, by seeking to prove that the interaction of demand and supply will result in an ov ...

handbooks on

monetary economics Monetary economics is the branch of economics that studies the different theories of money: it provides a framework for analyzing money and considers its functions (as medium of exchange, store of value, and unit of account), and it considers how m ...

acknowledge Merhling's assistance.

Money View

Perry Mehrling's brainchild, the ''Money View'', is a monetary-financial school of thought that links the (usually separate) intellectual realms of

and

finance Finance refers to monetary resources and to the study and Academic discipline, discipline of money, currency, assets and Liability (financial accounting), liabilities. As a subject of study, is a field of Business administration, Business Admin ...

. It offers an integrated approach for conceptualizing money, finance and (shadow) banking, which it sees as the fundamental infrastructure of

.Perry Mehrling, 2017. "Financialization and its discontents", '' Finance and Society'' 3(1), pp. 1–10. Other than most economic theories, it denotes analytical importance to the notion of

liquidity Liquidity is a concept in economics involving the convertibility of assets and obligations. It can include: * Market liquidity In business, economics or investment, market liquidity is a market's feature whereby an individual or firm can quic ...

as well as to the centrality of profit-seeking dealers as market makers. The Money View has first been developed, formulated and put forward by Mehrling and is now - despite still being an academic minority view - popularized by scholars, Steffen Murau, 2017. "Shadow Money and the Public Money Supply: The Impact of the 2007-09 Financial Crisis on the Monetary System", ''

Review of International Political Economy A review is an evaluation of a publication, product, service, or company or a critical take on current affairs in literature, politics or culture. In addition to a critical evaluation, the review's author may assign the work a rating to indi ...

'' 24(5). central bankers and market practitioners Zoltan Pozsar, 2014. "Shadow Banking: The Money View", Office of Financial Research 14(4). Perry Mehrling, Zoltan Pozsar, James Sweeney, Daniel Neilson, 2013. "Bagehot was a shadow banker: shadow banking, central banking, and the future of global finance", '' Shadow Banking Within and Across Borders''World Scientific Publishing Company. around the world.

Description

The speciality of the Money View is its ability to adequately synthesize current features of our integrated monetary and financial system, which Mehrling describes as money market funding of capital market lending''', a.k.a. shadow banking, by paying attention to both the

money market The money market is a component of the economy that provides short-term funds. The money market deals in short-term loans, generally for a period of a year or less. As short-term securities became a commodity, the money market became a compo ...

and the

capital market A capital market is a financial market in which long-term debt (over a year) or equity-backed securities are bought and sold, in contrast to a money market where short-term debt is bought and sold. Capital markets channel the wealth of savers ...

. The Money View includes elements of theories and insights by H.P. Minsky, Charles Kindleberger, Marcia Stigum, to name just a few.

Central institutions

Money, as a means of payment, to facilitate (final) settlement. Credit, as a promise to pay (money). Finance, to facilitate valuation of promises to pay. Banking, as a means of allocation of credit.

Hierarchy of Money

Inspired by Minsky's Hierarchy of Money, the Money View recognizes the ''de facto'' inequality of economic agents or entire countries in their capacity to issue something called money. A privileged few at the top of the hierarchy may issue money while the rest can only issue mere promises to pay money, i.e. credit (further down the hierarchy). The US dollar is at the top of the international hierarchy of money.

Politics

The Money View is inherently political. Its political dimensions are manifold and include the following: * a direct application of the values advocated by the

Enlightenment Enlightenment or enlighten may refer to: Age of Enlightenment * Age of Enlightenment, period in Western intellectual history from the late 17th to late 18th century, centered in France but also encompassing (alphabetically by country or culture): ...

as a philosophical movement (which, ''inter alia'', would avoid the simplifying assumptions on the nature of human beings that often prevail in economics, such as the

homo economicus The term ''Homo economicus'', or economic man, is the portrayal of humans as agents who are consistently rational and narrowly self-interested, and who pursue their subjectively defined ends optimally. It is a wordplay on ''Homo sapiens'', u ...

) *ideas centered on

reason Reason is the capacity of consciously applying logic by drawing valid conclusions from new or existing information, with the aim of seeking the truth. It is associated with such characteristically human activities as philosophy, religion, scien ...

as the primary source of

knowledge Knowledge is an Declarative knowledge, awareness of facts, a Knowledge by acquaintance, familiarity with individuals and situations, or a Procedural knowledge, practical skill. Knowledge of facts, also called propositional knowledge, is oft ...

* a recognition of the "difficulty of money" * an open rejection of equilibrium accounts of the economy (and therefore of mainstream economic thought & teaching) * a refutation of the

quantity theory of money The quantity theory of money (often abbreviated QTM) is a hypothesis within monetary economics which states that the general price level of goods and services is directly proportional to the amount of money in circulation (i.e., the money supply) ...

* critical thinking about the monetary-financial system (as opposed to proficient manipulation of formal models) * an emphasis on liquidity as compared to solvency

Epistemology

The Money View relies on comparatively few assumptions and uses

as the primary source of

. Generally, its analytical framework is based on viewing every monetary entity in terms of their stylized balance sheet, which serves as basic tools for asset-liability management, i.e. to measure sources and uses of funding. The Money View has been categorized by Zoltan Pozsar as 'monetary reality' (in contrast to monetary theory) because of its reliance on balance sheets and T-accounts.

References

External links

Perry Mehrling
at

Boston University Boston University (BU) is a Private university, private research university in Boston, Massachusetts, United States. BU was founded in 1839 by a group of Boston Methodism, Methodists with its original campus in Newbury (town), Vermont, Newbur ...

Frederick S. Pardee School of Global Studies {{DEFAULTSORT:Mehrling, Perry 1959 births Living people 21st-century American economists Barnard College faculty Harvard University alumni Institute for New Economic Thinking American financial economists