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Does Monetarism fit the UK Facts?

In: Monetarism in the United Kingdom


  • Alan Budd
  • Sean Holly
  • Andrew Longbottom
  • David Smith


This paper is arranged as follows. Section I discusses definitions of ‘monetarism’ and proposes a very general meaning which can be derived, with minimal restrictions from a widely accepted model of the economy. We suggest that the two principle propositions to be tested are (a) that there is a stable demand for money and (b) that changes in the money supply have been an independent source of changes in prices. Section II examines the long-run relationship between money and nominal income. It reports previous empirical studies and also presents long-run graphical evidence. Section III examines in more detail the question of ‘causality’. The conclusions are summarised in the final section.

Suggested Citation

  • Alan Budd & Sean Holly & Andrew Longbottom & David Smith, 1984. "Does Monetarism fit the UK Facts?," Palgrave Macmillan Books, in: Brian Griffiths & Geoffrey E. Wood (ed.), Monetarism in the United Kingdom, pages 75-119, Palgrave Macmillan.
  • Handle: RePEc:pal:palchp:978-1-349-06284-3_6
    DOI: 10.1007/978-1-349-06284-3_6

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