The Fiscal Theory of the Price Level says that money has value because the government accepts it for taxes, and inflation is fundamentally a fiscal phenomenon
Cochrane discusses with us his view on the development in Macroeconomics since the Great Depression. He also explains what Neo-Fisherian and Fiscal Theory of Price Level are, and why they are important for understanding the current economic situation around the world.
This is the second installment of our interview series "Where is the General Theory of the 21st Century?".
In this second installment, we continue our discussion with Prof. Scott Sumner, the Ralph G. Hawtrey Chair of Monetary Policy at the Mercatus Center at George...