Further Essays on Economic Theory and Policy

By Nicholas Kaldor; F. Targetti et al. | Go to book overview

8
HOW MONETARISM FAILED*

The great revival of 'monetarism' in the 1970s, culminating in the adoption of the strict prescriptions of the monetarist creed by a number of Western governments at the turn of the decade--particularly by President Reagan's administration in the United States and Mrs Thatcher's in Great Britain--will, I am sure, go down as one of the most curious episodes in history, comparable only to the periodic outbreaks of mass hysteria (such as the witch hunts) of the Middle Ages. Indeed, I know of no other instance where an utterly false doctrine concerning the causation of economic events had such a sweeping success in a matter of a few years without any attempt to place it in the framework of accepted theory concerning the manner of operation of economic forces in a market economy.

The central assertion of monetarism--assiduously propagated for a number of years by a single American economist, Professor Milton Friedman of Chicago--is that an excessive increase in the supply of money, caused by the decisions of the note-issuing authority, the central bank, is the main, if not the sole, cause of inflation; that the cyclical fluctuations of the economy reflect the irregularities and aberrations with which the money supply is increased by the monetary authority, which is responsible also for distortions in the structure of production caused by imperfect anticipation of the delayed effects of increases in the money supply on prices. Since on account of unstable and highly variable 'time lags' it is hopeless to expect that the monetary authorities can prevent such instabilities by well-timed measures (or compensate for them by well-timed countermeasures), the only safe rule to follow is to secure a modest and stable rate of increase in the rate of growth of the money

____________________
*
This paper was originally read to a Conference on "'Monetary Conditions for Economic Recovery,'" organised by the University of Amsterdam, November 14-16, 1984, and published in Challenge, May-June 1985.

-178-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this book

This book has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this book

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited page

Bookmark this page
Further Essays on Economic Theory and Policy
Table of contents

Table of contents

Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
/ 316

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.