A Critical Analysis of Monetarist—Rational Expectation—Supply-side (Incentive) Economics Approach to Accumulation During a Period of Inflationary Expectations

Louise Davidson

Chapter 18 in Money and Employment, 1990, pp 300-307 from Palgrave Macmillan

Abstract: Abstract David Laidler has written that ‘Like beauty, “monetarism” tends to be in the eye of the beholder’ (Laidler, 1981, p.l). Nevertheless, Laidler indicates that in his view the four key characteristics of monetarism are: (1) a ‘quantity theory’ approach to the demand for money and a belief that ‘fluctuations in the quantity of money are the dominant cause of fluctuations in money income’ (ibid., italics added), (2) a vertical long-run Phillips curve, (3) a monetary approach to the balance of payments, and (4) antipathy to any activist stabilization policy, and support for long-run policy rules for the target level of some monetary aggregate rather than the level of interest rates.

Keywords: Interest Rate; Real Rate; Nominal Interest Rate; Spot Market; Nominal Rate (search for similar items in EconPapers)
Date: 1990
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-11513-6_19

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DOI: 10.1007/978-1-349-11513-6_19

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