3 This work has been conducted by James Bishop and Mary-Alice Doyle. They have also conducted this exercise  for the more than 2 100 smaller geographical areas for which data are available, with similar results to those discussed here.
While monetary finance is not on our agenda, the size of central bank balance sheets is, in my view, important for a different reason. Since inflation is widely perceived to be ultimately a monetary phenomenon, the creation of a massive quantity of money would be a strong signal of a central bank’s commitment to fighting deflation.