Comment on Mayer on Monetarism
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Comment on Mayer on Monetarism
Credit and Capital Markets – Kredit und Kapital, Vol. 9 (1976), Iss. 2 : pp. 145–153
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Johnson, Harry G.
Cited By
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Revolutions and counterrevolutions in monetary economics: Keynes, keynesians, and new classicists
Aschheim, Joseph
Tavlas, George S.
Atlantic Economic Journal, Vol. 18 (1990), Iss. 4 P.1
https://doi.org/10.1007/BF02299013 [Citations: 0]
References
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1. J. R. Hicks, The Crisis in Keynesian Economics, Oxford: Clarendon Press, 1974.
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2. J. R. Hicks, What Is Wrong With Monetarism, Lloyd’s Bank Review, No. 118, October 1975, pp. 1-13.
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3. N. Kaldor, The New Monetarısm, Lloyd’s Bank Review, July 1970, pp. 1-18.
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Abstract
Comment on Mayer on Monetarism
Discussion of monetarism belongs to a recently passed era of U.S. policy debates and runs the danger of formalization. Of Mayer’s“ propositions, the crucial one is the assumption of a stable demand for money which differentiates monetarism from both Keynesian theory and the old quantity theory (unstable velocity) that Keynes attacked. Classical quantity theory went through two phases; the “neutrality of money” phase, designed to clear the way for real general equilibrium analysis; and “the conditions for money equilibrium analysis”, of disturbances to real and monetary equilibrium in a monetary economy. Prewar II theorists never regarded policy changes in money supply as a destabilizing factor, and treated expectational change in money demand as involving instability of velocity; to be offset by policy. Modern quantity theorists instead make policy a chief disturber of equilibrium, in the face of a stable demand for money.