Money supply numbers have long been an orphan in the tool kit of the big central banks. This is unfortunate because the numbers have been sending important signals before and during the pandemic.Economists at the Bank for International Settlements have found a statistically and economically significant correlation across a range of countries between excess money growth in 2020 and average inflation in 2021 and 2020. And you do not have to be an out and out devotee of the quantity theory of money to see that the buoyancy of US house prices and equities last year was substantially about too much money chasing too few assets.

There is, of course, a reason for this central bankerly neglect of money. In the heyday of monetary targeting in the 1980s central bankers — most notably Paul Volcker at the US Federal Reserve — were remarkably successful in bringing down inflation from record postwar levels after successive oil price shocks, although this came at the cost of savage recessions. Subsequently the link between money supply and inflation weakened.

This was down to velocity, the measure of how often money changes hands. When this happened at a predictable pace, money and output grew together. At the same time there was a clear relationship between inflation and excess money growth — the difference between money growth and growth in real gross domestic product.