Perry Mehrling - We will miss you

 

Perry Mehrling suddenly died this week, and the monetary economics world will be diminished. He was a monetary theorist and an important economic historian, though his work in history was largely accidental. 

Mehrling’s defining intellectual contribution is his "money view", an alternative analytical framework designed to make sense of the modern, highly integrated global monetary and financial system. Rather than relying on traditional macroeconomic equilibrium models, the money view approaches the economy through the lens of monetary reality (using balance sheets, ledger accounts, and cash flows).  His view focused on the link between short-term funding and long-term capital markets, the hierarchy of money, and the importance of liquidity over solvency. 

He often expressed his ideas through intellectual biographies and histories of economic thought, bridging abstract financial theory with the real-world evolution of central banking and capital markets. Two examples, Fischer Black and the Revolutionary Idea of Finance (2005), an influential intellectual biography of Fischer Black (of Black-Scholes fame), exploring how modern quantitative finance transformed Wall Street and academic economics, and The Money and the Empire: Charles Kindleberger and the Dollar System (2022), a definitive intellectual biography of economist Charles Kindleberger (author of Manias, Panics, and Crashes), tracing the historical mechanics of how the U.S. dollar displaced the British pound to become the world’s dominant reserve currency.

His writing is not easy and requires strong focus, but i think it resonates with anyone who works in finance and wants to get a good feel on how the financial system works.