Monetarism

G. R. Steele
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G. R. Steele: University of Lancaster

Chapter 7 in Monetarism and the Demise of Keynesian Economics, 1989, pp 65-74 from Palgrave Macmillan

Abstract: Abstract Although found wanting as a theory of interest rate detemination, Keynes’s analysis of the demand for money represents an important stage in the development of Monetarism. In regarding money as one asset among many competing alternatives, Monetarism has drawn upon Keynes’s insight as to the wider motives for holding money. In The General Theory, Keynes concentrated upon the choice between just two assets, money and bonds, and discussed the speculative demand for money in that context. This was a simplification, legitimate for exposition, but one which was taken too literally by later exponents of Keynesianism. Monetarism relaxed that simplifying assumption. At the same time, it placed Keynes’s monetary analysis into its true context, that of an amplication of the original Quantity Theory.

Keywords: Interest Rate; Monetary Policy; Money Supply; Phillips Curve; Reservation Wage (search for similar items in EconPapers)
Date: 1989
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-09994-8_7

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DOI: 10.1007/978-1-349-09994-8_7

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