Jorda, Schularick and Taylor: "In the age of credit, monetary aggregates come a distant second"

From the PDF recently mentioned by James Hamilton:

In the age of credit, monetary aggregates come a distant second when it comes to the association with macroeconomic variables. Real changes in M2 were more closely associated with cyclical fluctuations in real variables than credit before WW2. This is no longer true in the postwar era. As Table 10 demonstrates, today changes in real credit are generally much tighter aligned with real fluctuations than those of money.

From page 29 of the Macrofinancial History PDF, here is Table 10:

Real money growth in the U.S. shows 0.47 correlation with the growth rate of output before the Second World War, but only 0.24 -- half the correlation --  after the war.

Real credit growth in the U.S. shows 0.30 correlation with output growth before the Second World War, but shows 0.67 -- more than twice the correlation -- after the war.

This is a big deal.

The stuff we use for money has changed. That's why we're in the mess