The Monetarist Era

Abstract

It is no coincidence that the prevalence of monetarism is highly correlated with failure of economic performance. Those most convinced by monetarist doctrines are to be found at the helm of the slowest growing economies. There are interlocking reasons why this is so. It is partly that monetarist prescriptions lead to slow growth, and partly that the cultural attitudes which breed monetarist opinions flourish especially strongly in slow-growing economies. Monetarism is the intellectual component of the vicious spiral of import-led stagnation from which poorly performing economies suffer.

‘The experience of being disastrously wrong is salutary;no economist should be denied it, and not many are.’

John Kenneth Galbraith