Monetarism in Historical Perspective
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Monetarism in Historical Perspective
Credit and Capital Markets – Kredit und Kapital, Vol. 9 (1976), Iss. 2 : pp. 154–163
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Cagan, Phillip
References
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Abstract
Monetarism in Historical Perspective
The monetarist view grew out of the climate of professional economic opinion in the 1940s and early 1950s when discussions of policy paid no attention to money. Monetarism is a set of propositions about policy. It fosters theoretical models of the economy in which money is given a prominent role, but it is not dependent upon any particular model. Monetarısm has helped to re-establish the importance of a proper monetary policy to economic stabilization. Much of the monetarist view has come to be widely accepted. A controversy between monetarists and fiscalists which remains unsettled is whether a discretionary fiscal policy would be needed if a policy of fairly stable monetary growth were pursued. The monetarist position is that such a monetary policy would produce greater stabilization than we have had in the past and that we would then be better off with an automatic than a discretionary fiscal policy.