Good morning! An old question in economics is this: is it right to think of the stance and effects of monetary policy in terms of interest rates and asset prices – or are these things better measured by the size and growth of banks’ balance sheets, whether that of the central bank (“narrow money”) or commercial banks (“broad money” 1 )? Old it may be, but this question throws up a couple of others that are relevant today. First, is the inflation we’re experiencing mainly the result of the growth in broad money in 2020 – and were both the “inevitable” result of the QE conducted that year, as some have said? Second, ... (full story)