The Continuing Muddles of Monetary Theory: A Steadfast Refusal to Face Facts

C. A. E. Goodhart

Economica, 2009, vol. 76, issue s1, 821-830

Abstract: Lionel Robbins was concerned about the methodology of economic science. When he discussed the relationship between theory and ‘reality’, two of the examples of inappropriate relationships were taken from monetary economics. Such shortcomings continue. Among the worst are: (1) IS/LM: whereby the monetary authorities set the monetary base, and the interest rate is market determined; (2) the monetary base multiplier of bank deposits, and the role of reserve ratios; (3) the current three‐equation neoclassical consensus, assuming perfect creditworthiness, and hence no need for banks; (4) the analysis of the evolution of money.

Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

Downloads: (external link)
https://doi.org/10.1111/j.1468-0335.2009.00790.x

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:econom:v:76:y:2009:i:s1:p:821-830

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0013-0427

Access Statistics for this article

Economica is currently edited by Frank Cowell, Tore Ellingsen and Alan Manning

More articles in Economica from London School of Economics and Political Science Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().