There is a great twitter debate going on right now on this topic.
Cullen wrote a post today on how money is always endogenous, even in the long run. Some people disagree.
I’d imagine we will get some posts out of a few of them, and I hope Frances Coppola chimes in at some point. My take is: The accounting says money is always endogenous, in both long and short run. If it is endogenous in the.
We can see this directly from excess bank reserves vs. NGDP, right? We have lots of channel stuffing today in the amount of excess bank reserves, but NGDP isn’t really going up any more or less than before. Even IOR doesn’t matter in this case, because the money is still out there.