Abstract
Monetarism is a doctrine which suggests that money has a major influence on both the level of economic activity and the price level, and that the objectives of monetary policy are best realised by targeting the rate of growth of money supply. As such, monetarism has strong affinities with the quantity theory of money, particularly as exposited by Wicksell (above, Chapter 25) and Irving Fisher (above, Chapter 26), but its modern variant is largely associated with the work of Milton Friedman. In 1976, this, and his other contributions to economics, gained him the Nobel Prize in Economics; his contributions to monetarism also made him one of the most controversial writers on economic policy in the post-Second World War period.
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Notes for further reading
Friedman’s economics should consult his Essays in Positive Economics (Chicago University Press, Chicago, 1953);
Friedman’s ‘The Quantity Theory of Money: A Restatement’ in M. Friedman (ed.), Studies in the Quantity Theory of Money (Chicago University Press, Chicago, 1956);
Friedman’s ‘The Role of Monetary Policy’, American Economic Review, 58(1), March 1968, pp. 1–17;
Friedman’s A Monetary History of the United States 1867–1960 (with Anna Schwarz, Princeton University Press for the National Bureau of Economic Research, Princeton, 1963).
Kurt B. Leube (ed.), The Essence of Friedman (Stanford University and Hoover Institution Press, Stanford, 1987)
Henry Simons, are contained in his ‘Rules versus Authorities in Monetary Policy’, Journal of Political Economy, 44(1) February 1936, pp. 1–30.
M. Friedman and W. Heller, Monetarism versus Fiscal Policy (W.W. Norton, New York, 1969)
William Frazer, Power and Ideas: Milton Friedman and the big U-turn (Gulf/Atlantic Publishing, Gainesville, Florida, 1988).
A.W. Phillips, ‘The relation between unemployment and the rate of change in money wages’, Economica, vol. 25, November 1958, pp. 283–99.
R.E. Lucas, ‘Expectations and the Neutrality of Money’, Journal of Economic Theory 4(2), April 1972, pp. 103–24.
F.E. Hahn, Money and Inflation (Blackwell, Oxford, 1981);
F.H. Hahn and K.J. Arrow, General Competitive Analysis (Oliver and Boyd, Edinburgh, 1971).
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© 2003 Gianni Vaggi and Peter Groenewegen
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Vaggi, G., Groenewegen, P. (2003). Milton Friedman (1912–): Monetarism and its Critics. In: A Concise History of Economic Thought. Palgrave Macmillan, London. https://doi.org/10.1057/9780230505803_34
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DOI: https://doi.org/10.1057/9780230505803_34
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