Abstract
The concept of ‘monetary regime figures prominently in the recent rational expectations literature. Elsewhere,1 I have used the following two-part definition of it: a monetary régime is a system of expectations that governs the behaviour of the public and that is sustained by the consistent behaviour of the policy-making authorities. This is a rational expectations concept although, as the rational expectations literature tends to go, it is stated here in fairly loose language. The present definition assumes that people understand the systematic components of the authorities’ behaviour in a general sort of way, but avoids a linkage so tight as to build, for example, short-run neutrality or policy ineffectiveness assertions into the concept itself. Nonetheless, it is in effect an equilibrium concept. The expectations of the public and the actual behaviour of the authorities mesh in equilibrium; when they do not mesh, it does not make sense to speak of a régime.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Barro, Robert J. (1981) ‘The Equilibrium Approach to Business Cycles’, in his Money, Expectations, and Business Cycles (New York: Academic Press).
Coddington, Alan (1976) ‘Keynesian Economics: The Search for First Principles’, Journal of Economic Literature, December reprinted in his 1983 book of the same title.
Eden, Benjamin (1979) ‘The Nominal System: Linkage to the Quantity of Money or to Nominal Income’, Revue Economique, January.
Friedman, Milton, and Anna J. Schwartz (1963) A Monetary History of the United States, 1867–1960 (Princeton: Princeton University Press, for the National Bureau of Economic Research).
Friedman, Milton (1964) ‘The Monetary Studies of the National Bureau’, in The National Bureau Enters its 45th Year (44th Annual Report), reprinted in his Optimum Quantity of Money and Other Essays (Chicago: University of Chicago Press, 1969).
Friedman, Milton (1968) ‘The Role of Monetary Policy’, American Economic Review, March.
Friedman, Milton (1977) ‘Nobel Lecture: Inflation and Unemployment’, Journal of Political Economy, June.
Gordon, Robert J. (1981) ‘Output Fluctuations and Gradual Price Adjustment’, Journal of Economic Literature, June.
Hahn, Frank (1983) Money and Inflation (Cambridge, Mass: MIT Press).
Kaldor, Nicholas (1982) ‘The Radcliffe Report and Monetary Policy’ (the 1981 Radcliffe Lectures), in his The Scourge of Monetarism (Oxford: Oxford University Press).
Keynes, J. Maynard (1973) Collected Writings XIII: The General Theory and After; Part I: Preparation (Cambridge: Macmillan, for the Royal Economic Society).
Klein, Benjamin (1975) ‘Our New Monetary Standard: The Measurement and Effects of Price Uncertainty, 1880–1973’, Economic Inquiry, December.
Leijonhufvud, Axel (1968) On Keynesian Economics and the Economics of Keynes (New York: Oxford University Press).
Leijonhufvud, Axel (1981) ‘The Wicksell Connection’, in Information and Coordination: Essays in Macroeconomic Theory (New York: Oxford University Press).
Leijonhufvud, Axel (1983) ‘Keynesianism, Monetarism and Rational Expectations: Some Reflections and Conjectures’, in Roman Frydman and Edmund S. Phelps (eds) Individual Forecasting and Aggregate Outcomes: ‘Rational Expectations’ Examined (New York: Cambridge University Press).
Leijonhufvud, Axel (1984a) ‘Inflation and Economic Performance’, in Barry N. Siegel (ed.) Money in Crisis: The Federal Reserve, the Economy, and Monetary Reform (Cambridge, Mass: Ballinger).
Leijonhufvud, Axel (1984b) ‘Constitutional Constraints on the Monetary Powers of Government’, in Richard B. McKenzie (ed.) Constitutional Economics: Containing the Economic Powers of Government (Lexington, Mass: D.C. Heath).
Lucas, Robert E., Jr (1972) ‘Expectations and the Neutrality of Money’, Journal of Economic Theory, April.
Lucas, Robert E., Jr (1977) ‘Understanding Business Cycles’, in Karl Brunner and Allan H. Meltzer (eds) Stabilization of the Domestic and International Economy, Carnegie-Rochester Series on Public Policy, Vol. 5 (Amsterdam: North-Holland).
Lucas, Robert E., Jr (1981a) ‘Tobin and Monetarism: A Review Article’, Journal of Economic Literature, June.
Lucas, Robert E., Jr (1981b) Studies in Business-Cycle Theory (Cambridge, Mass: MIT Press).
Moore, Basil J. (1983) ‘Keynes and the Endogeneity of the Money Stock’, mimeo.
Myrdal, Gunnar (1939) Monetary Equilibrium (London: W. Hodge).
Okun, Arthur M. (1981) Prices and Quantities: A Macroeconomic Analysis (Washington, DC: Brookings).
Tobin, James (1963) ‘Commercial Banks as Creators of “Money”’ in Deane Carson (ed.) Banking and Monetary Studies (Homewood, Ill: Irwin).
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Copyright information
© 1987 International Economic Association
About this chapter
Cite this chapter
Leijonhufvud, A. (1987). Rational Expectations and Monetary Institutions. In: de Cecco, M., Fitoussi, JP. (eds) Monetary Theory and Economic Institutions. International Economic Association Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-08781-5_3
Download citation
DOI: https://doi.org/10.1007/978-1-349-08781-5_3
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-08783-9
Online ISBN: 978-1-349-08781-5
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)