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Monetarism I: The Counter-Revolution

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Abstract

Monetarists can be thought of as constituting the majority party among those ranged in opposition to Keynes; as against the Austrians as minority party, whose work is generally less well known. In addition, the monetarist framework of analysis so closely parallels that of Keynes that points of potential conflict are easily identified, and the interesting questions concern the validity of the monetarists’ interpretation of Keynes’s propositions in relation to their own and the provenance of the monetarist model itself, in terms of the relative importance of pre-Keynesian and Keynesian influences.

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Notes and References

  1. For an account of this methodology by which theories are assessed on their empirical performance rather than by the degree of realism of their assumptions, see M. Friedman, Essays in Positive Economics (Chicago: Chicago University Press, 1952) pp. 3–43.

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  2. H. G. Johnson, Further Essays in Monetary Economics (London: Allen & Unwin, 1972) p. 57.

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  3. M. Friedman, The Counter Revolution in Monetary Theory, Wincott Foundation Lecture 1970 (London: IEA, 1970) p. 10.

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  4. M. Friedman, A Theoretical Framework for Monetary Analysis, Occasional Paper 112 (New York: National Bureau of Economic Research, 1971) p. 27.

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  5. M. Friedman, ‘The Quantity Theory of Money: A Restatement’, in M. Friedman (ed.), Studies in the Quantity Theory of Money (Chicago: UCP, 1956) pp. 3–21. Patinkin’s criticism was contained in D. Patinkin, ‘The Chicago Tradition, The Quantity Theory and Friedman’, The Journal of Money, Credit and Banking (1969) pp. 46–70.

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  6. D. Laidler, The Demand for Money 2nd edn (New York: Dun-Donnelley, 1977) p. 68.

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  7. See G. A. Fletcher, The Discount Houses in London: Principles, Operations and Change (London: Macmillan, 1976) p. 67;

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  8. J. C. R. Dow, The Management of the British Economy 1945–60 (Cambridge: Cambridge University Press, 1968) pp. 223–7.

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© 1987 Gordon A. Fletcher

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Fletcher, G.A. (1987). Monetarism I: The Counter-Revolution. In: The Keynesian Revolution and its Critics. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-08736-5_16

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