Abstract
For the U.K., unlike the U.S. economy, there is no complete model that is regularly used in forecasting which could be said to be Monetarist, at least in the sense outlined below.1 Also, it is difficult to accept that policy prescriptions arrived at by analysing large-scale U.S. Monetarist models are equally applicable to the United Kingdom. Although the U.K. economy might in part be characterised by the same type of behavioural relations as the U.S. economy, it is nevertheless unlikely that the size of the coefficients in such behavioural equations are the same. In addition the U.S. economy closely approximates a closed economy, and U.S. models are therefore likely to omit aspects crucial to an understanding of the behaviour of a small open economy like the United Kingdom. We have attempted to solve this particular dilemma by presenting a U.K. Monetarist model which, unlike the Keynesian and New Cambridge models, is the preserve of no particular forecasting organisation but is instead based on an amalgam of the research work of a number of monetary economists. Naturally, given this eclectic approach, it is possible, indeed probable, that some people who label themselves as ‘Monetarists’will disagree with some elements of the Monetarist model presented here; however, it is hoped that such people are in broad agreement with what follows.
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Selected Reading
Goodhart, C. A. E. (1975) Money, Information and Uncertainty (London, Macmillan). This is difficult in parts, but is an excellent survey of the literature and offers a critical approach.
Gordon, R. J. (1976) ‘Recent Developments in the Theory of Inflation and Unemployment’, Journal of Monetary Economics, vol. 2, pp. 185–220. This deals with theoretical aspects and has a section on rational expectations.
Laidler, D. E. W. (1971) ‘The Influence of Money on Economic Activity: A Survey of Some Current Problems’, in Monetary Theory and Monetary Policy in the 1970s, ed. Clayton, G., Gilbert, J. and Sedgwick, R. (London, Oxford University Press).
Laidler, D. E. W. (1977a.) The Demand for Money: Theories and Evidence, 2nd ed. (New York, Dun-Donnelley).
Laidler, D. E. W. (1978b) ‘Money and Money Income: An Essay on the Transmission Mechanism, Journal of Monetary Economics, vol. 4, pp. 151–92.
Laidler, D. and Parkin, J. (1975) ‘Inflation: A Survey’, Economic Journal, vol. 85, December, pp. 741–809.
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© 1979 Keith Cuthbertson
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Cuthbertson, K. (1979). Monetarist Views. In: Macroeconomic Policy. Macmillan New Studies in Economics. Palgrave, London. https://doi.org/10.1007/978-1-349-16204-8_4
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DOI: https://doi.org/10.1007/978-1-349-16204-8_4
Publisher Name: Palgrave, London
Print ISBN: 978-0-333-25988-7
Online ISBN: 978-1-349-16204-8
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