Monetarist


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Related to Monetarist: Keynesian, Monetarist Theory

Monetarist

An economist who believes that changes in the money supply are the most important determinants of economic activity and economic cycles. See: Monetarism

Monetarist

An economist who believes that inflation results directly and exclusively from the expansion of a country's money supply. That is, if a government prints money, inflation will result. Monetarists believe that a government ought to set target interest rates to encourage or slow growth in the supply. For example, when an economy is growing rapidly, monetarists recommend raising interest rates. On the other hand, they recommend lowering interest rates in a recession. In general, however, monetarists recommend that a government maintain a relatively steady money supply, with an allowance for growth to keep up with GDP expansion. Many monetarist beliefs, notably the one regarding interest rates, are still commonly held, though many economists believe the relationship between money supply and inflation is more complex than monetarism theorizes. Milton Friedman is considered the father of modern monetarism.

monetarist

A proponent, usually an economist, of monetarism. Milton Friedman is probably America's best-known monetarist.
References in periodicals archive ?
For example, leading Market Monetarist School writer Scott Sumner favors a system wherein the Federal Reserve chooses the NGDP growth trajectory and then sets up a futures market for trading NGDP contracts.
We think that the examples presented here and in Williamson and Wright (forthcoming) illustrate the usefulness of the New Monetarist approach.
The article also presents some empirical analysis using a sample of fifteen countries to explore whether the basic monetarist propositions still hold true.
Their view is that supply-side, or monetarist, policies are a brutal remedy for inflation and other economic ills.
Wood asks whether modern monetarists should be seen as quantity theorists, and answers "yes.
Although Austrians and Monetarists are working at different levels of aggregation, they are dealing with the selfsame macroeconomy, as evidenced by each school's recognition of the movements of output that constitute the other's primary concern.
The paper envisages the proclaimed monetarist exogeneity of money supply to prices, nominal income, and to real income.
Volume 2 presents more evidence of political pressure, some harvested from presidential library archives, and a monetarist interpretation of how Fed policy errors caused, in Meltzer's words, the Great Inflation, which peaked at 14 percent in 1980.
In my view this sort of "mechanical" monetarist approach might be sufficient, if pursued aggressively enough.
In the policy arena, central banks understandably never embraced antiactivist Austrian theory, and monetarist thinking prevailed only fleetingly (around 1979-82) and in a degraded and politically corrupted form.
Allen Head, Queen's University; Lucy Qian Liu, International Monetary Fund; Guido Menzio, University of Pennsylvania and NBER; and Randall Wright, University of Wisconsin, Madison and NBER, "Sticky Prices: A New Monetarist Perspective"
Williamson and Wright argue that it is time for a New Monetarist framework to compete with the New Keynesians.