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Rethinking the Monetarist Experience: Monetary Theory and Monetary Policy in the United States

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  • Benjamin K. Johannsen
  • Bradley W. Bateman

Abstract

In the history of monetary theory and monetary policy, there can be little doubt that the 1980?s are seen as a watershed. Following a disastrous decade of inflation and recession in the 1970?s, the monetarist ideas of Milton Friedman are largely seen to have triumphed then over the older Keynesian demand management policies. The moment of monetarism?s ascendancy is probably seen most often as 1979 ? the year that Margaret Thatcher was first elected as Prime Minister of Britain, having run for office on an explicit platform of monetarist ideas, as well as the year that Paul Volcker was named chair of the Federal Reserve?s Board of Governors in the United States. The purpose of this essay is to focus on what happened in the United States after Volcker?s appointment as chair of the Federal Reserve.

Suggested Citation

  • Benjamin K. Johannsen & Bradley W. Bateman, 2013. "Rethinking the Monetarist Experience: Monetary Theory and Monetary Policy in the United States," HISTORY OF ECONOMIC THOUGHT AND POLICY, FrancoAngeli Editore, vol. 2013(1), pages 161-179.
    • Handle: RePEc:fan:spespe:v:html10.3280/spe2013-001009
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    References listed on IDEAS

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    1. David E. Lindsey & Athanasios Orphanides & Robert H. Rasche, 2013. "The Reform of October 1979: How It Happened and Why," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 487-542.
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    3. Jerry L. Jordan, 1986. "The Andersen-Jordan approach after nearly 20 years," Review, Federal Reserve Bank of St. Louis, issue Oct, pages 5-8.
    4. Daniel L. Thornton, 1983. "The FOMC in 1982: de-emphasizing M1," Review, Federal Reserve Bank of St. Louis, vol. 65(Jun), pages 26-35.
    5. Backhouse,Roger E. & Bateman,Bradley W. (ed.), 2006. "The Cambridge Companion to Keynes," Cambridge Books, Cambridge University Press, number 9780521840903.
    6. Alan Greenspan, 1993. "Statement to Congress, March 24, 1993(federal budget deficit)," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue May, pages 471-473.
    7. Backhouse,Roger E. & Bateman,Bradley W. (ed.), 2006. "The Cambridge Companion to Keynes," Cambridge Books, Cambridge University Press, number 9780521600606.
    8. Martin Feldstein, 1994. "American Economic Policy in the 1980s: A Personal View," NBER Chapters, in: American Economic Policy in the 1980s, pages 1-80, National Bureau of Economic Research, Inc.
    9. Benjamin M. Friedman, 1984. "Lessons from the 1979-1982 Monetary Policy Experiment," NBER Working Papers 1272, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Francesco Cattabrini & Fabio Masini, 2017. "Balance of Payment, Wage Indexation and Growth: the Role of CESPE in Italian Policy-Making in the 1970s," HISTORY OF ECONOMIC THOUGHT AND POLICY, FrancoAngeli Editore, vol. 2017(2), pages 25-48.

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    More about this item

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics

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