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The Triumph of Monetarism?

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  • J. Bradford De Long

Abstract

The story of 20th century macroeconomics begins with Irving Fisher. In his books Appreciation and Interest (1896), The Rate of Interest (1907), and The Purchasing Power of Money (1911), Fisher fueled the intellectual fire that became known as monetarism. But what has happened to monetarism at the end of the 20th century? The short answer is that much of this current of thought is still there, but its insights pass under another name. We may not all be Keynesians now, but the influence of monetarism on how we all think about macroeconomics today has been deep, pervasive, and subtle. Why then do we today talk much more about the "New Keynesian" economists than about the "New Monetarist" economists? I believe that to answer this question we need to look at the history of monetarism over the 20th century. One fruitful way to look at the history of monetarism is to distinguish between four different variants or subspecies of monetarism that emerged and for a time flourished in the century just past: First Monetarism, Old Chicago Monetarism, High Monetarism, and Political Monetarism.

Suggested Citation

  • J. Bradford De Long, 2000. "The Triumph of Monetarism?," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 83-94, Winter.
    • Handle: RePEc:aea:jecper:v:14:y:2000:i:1:p:83-94
    Note: DOI: 10.1257/jep.14.1.83
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.14.1.83
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    References listed on IDEAS

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    2. Dr. Samuel Reynard, 2006. "Money and the Great Disinflation," Working Papers 2006-07, Swiss National Bank.
    3. Mauricio Avella Gómez, 2007. "El encaje bancario en Colombia Perspectiva general," Borradores de Economia 470, Banco de la Republica de Colombia.
    4. Robert Dimand, 2002. "Patinkin on Irving Fisher's monetary economics," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 9(2), pages 308-326.
    5. Scott Sumner, 2015. "What Would Milton Friedman Have Thought of the Great Recession?," American Journal of Economics and Sociology, Wiley Blackwell, vol. 74(2), pages 209-235, March.
    6. Nilss Olekalns, 2002. "The Teaching of First Year Economics in Australian Universities," Department of Economics - Working Papers Series 848, The University of Melbourne.
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    9. Sylvie Rivot, 2015. "Rule-based frameworks in historical perspective: Keynes' and Friedman's monetary policies versus contemporary policy-rules," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 22(4), pages 601-633, August.
    10. Csaba, László, 2002. "Az átalakulás fejlődéselmélete [The development theory of the transformation]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(4), pages 273-291.
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    More about this item

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics

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