Advanced Search
MyIDEAS: Login

Monetarist Principles and the Money Stock Growth Rule

Contents:

Author Info

  • McCallum, Bennett T

Abstract

Given the influence of Milton Friedman ,it is hard to keep from identifying "monetarisms" with the advocacy of a policy rule that would require the money stock to grow at a constant rate and prohibit cyclical adjustments in government spending or in tax schedules. This identification is somewhat inaccurate since Karl Brunner and Allan Meltzer, the other two leading proponents of monetarism, have not always been advocates of a constant money growth rate. It may nevertheless he useful to relate one's thoughts about monetarism to Friedman's rule, as will be done in this paper. But the question that immediately arises is, what more fundamental beliefs about the economy give rise to the idea that such a rule would be socially desirable. At this more basic level there may he more agreement among monetarists than about the rule itself. in any event, it appears that there are two basic monetarist propositions that are of crucial importance, as follows. (i) Cyclical and secular movements in nominal income are primarily attributable to movements in the stock of money relative to capacity output. (ii) There is no permanent tradeoff between unemployment and inflation or any other characteristic of the path of the price level -- that is, the natural rate of unemployment hypothesis is valid.

(This abstract was borrowed from another version of this item.)

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://links.jstor.org/sici?sici=0002-8282%28198105%2971%3A2%3C134%3AMPATMS%3E2.0.CO%3B2-N&origin=repec
File Function: full text
Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 71 (1981)
Issue (Month): 2 (May)
Pages: 134-38

as in new window
Handle: RePEc:aea:aecrev:v:71:y:1981:i:2:p:134-38

Contact details of provider:
Email:
Web page: http://www.aeaweb.org/aer/
More information through EDIRC

Order Information:
Web: http://www.aeaweb.org/subscribe.html

Related research

Keywords:

Other versions of this item:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Christ, Carl F., 1978. "Some dynamic theory of macroeconomic policy effects on income and prices under the government budget restraint," Journal of Monetary Economics, Elsevier, vol. 4(1), pages 45-70, January.
  2. Blinder, Alan S. & Solow, Robert M., 1973. "Does fiscal policy matter?," Journal of Public Economics, Elsevier, vol. 2(4), pages 319-337.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Alan S. Blinder, 1982. "Issues in the Coordination of Monetary and Fiscal Policy," NBER Working Papers 0982, National Bureau of Economic Research, Inc.
  2. Awad, Ibrahim L., 2002. "ظاهرة الركود التضخمى فى الاقتصاد المصرى: دراسة تحليلية
    [The Phenomenon of Stagflation in The Egyptian Economy: Analytical Study]
    ," MPRA Paper 5465, University Library of Munich, Germany.
  3. Bennett T. McCallum, 1985. "Monetary vs. Fiscal Policy Effects: A Review of the Debate," NBER Working Papers 1556, National Bureau of Economic Research, Inc.
  4. Bennett T. McCallum, 1984. "Monetarist Rules in the Light of Recent Experience," NBER Working Papers 1277, National Bureau of Economic Research, Inc.
  5. Dumitriu, Ramona & Stefanescu, Razvan, 2013. "Provocările politicii monetare
    [Monetary policy challenges]
    ," MPRA Paper 50261, University Library of Munich, Germany, revised 28 Sep 2013.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:71:y:1981:i:2:p:134-38. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros) or (Michael P. Albert).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.