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.
Bellante and Garrison (1988) compared monetarist work on the Phillips curve with the dynamic monetary theory of Friedrich Hayek, illustrated by Hayekian triangles (Hayek, 1931).
2011), the monetarists define the beginning of the monetary transmission general form as a change in the monetary base, which is determined by the implementation of monetary policy instruments, especially the open market operations.
The monetarist school was established in the 1930s by Arthur Cecil Pigou.
The next section explores the existing empirical work on the short-run monetary approach to the balance of payments to see if it can discriminate between the differing views of Keynesian and monetarist economists.
These monetarist posited quite strongly that in every economy, there must be a very significant relationship between money supply and output, and hence income.
Central banks adopted monetarist thinking: Germany's Bundesbank was the first central bank in the world to publish a money supply target, for 1975.
He argued that the general election of 1979 marked a decisive change in British political economy--the moment at which a political battle brought on by the failure of the Keynesian model was decisively won by the Conservatives and their monetarist conception of economic policy.
Are we looking in the wrong places, or is it time to update monetarist theory?
This approach, which is being followed by governments all over the world, is based on the monetarist theory, according to which the government and Central Bank inject liquidity into the banking market, interest rates come down, consumers spend more and so the economy starts growing faster.
The monetarist prescription sees this liquidity as promoting lending, lower interest rates and greater aggregate demand.
According to the authors, wage moderation is the result of pressure on wage growth, which in turn is generated by a "global ideological shift towards neoliberal and monetarist ideas, global and European economic integration and a weakened position of trade unions in a number of European countries".