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Discussion

  • Victoria Chick
Part of the Keynes Seminars book series (KESE)

Abstract

Why should it be that the perceptions of what constitutes monetarism, or what constitutes an appropriate monetary approach to policy, should differ so much between the USA and Britain? There are, I think, two groups of reasons for these differences. One stems, as Tim Congdon himself said, from the institutional background of the financing of the government budget in the two countries. Hansen, in an article in the American Economic Review in 1973, called attention to this. He contrasted what he called the US and European budget restraints on government. In the European case (of which Britain was one example whereas German and Holland were not of this type) the Treasury could use the central bank as its banker and so any deficit had an immediate impact on high-powered money and could later be funded as part of monetary policy. The impact effect, however, was a monetary one.

Keywords

Monetary Policy Central Bank Fiscal Policy Money Supply Federal Reserve System 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Palgrave Macmillan, a division of Macmillan Publishers Limited 1990

Authors and Affiliations

  • Victoria Chick

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